The Australian Securities and Investments Commission (ASIC) has given pre-approval to fund managers looking to launch Bitcoin exchange-traded funds (ETFs), according to Business Insider.
Many Australian funds have started the application process after the green ASIC turned on the spot ETF. After months of consulting with experts in the Bitcoin and crypto industry, the company’s regulators issued new guidance for the space, and detailed draft regulatory requirements for funds wishing to offer Bitcoin spot ETFs.
In a statement on Friday, ASIC wrote, “We are aware of the interest in, and demand for, ETPs and other investment products holding crypto assets in Australia.” One of the requirements for fund managers is that they need to appoint a Bitcoin custodian who is “necessary to ensure crypto assets are kept in safe and secure storage”.
Safe and secure custody includes storing Bitcoin private keys in cold storage with air gaps, via wallets that are subject to “strong physical security practices.” Backups of redundant seed phrases stored in geographically separated locations are also required, according to Sydney Morning Herald.
Funds must also have net tangible assets of at least $10 million to launch a Bitcoin ETF, along with complying with other pricing and risk management obligations.
ASIC commented on why Bitcoin was one of only two newly approved assets, “We propose this because we recognize that crypto assets vary greatly in their features, characteristics, risks and ways of operating, and we consider that only a few may be suitable for used. hosted by a registered managed investment scheme.”
This comes just one week after Valkyrie and ProShares launched the first Bitcoin futures ETF in the United States. Many in the US are eagerly awaiting approval of Bitcoin spot-based ETFs, which are considered a safer investment vehicle that can track Bitcoin prices more closely. In any case, the upcoming Australian spot ETF is a step in the right direction when it comes to educating traditional investors about Bitcoin and spreading adoption.
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