The Australian Securities and Investments Commission (ASIC) says that the nation could soon approve exchange-traded products (ETPs) for qualifying cryptocurrencies.
A new report by ASIC shows that consumer feedback received after a four-week consultation period was overwhelmingly positive for crypto ETPs.
“There was near-unanimous support for ETPs and other investment products that provide exposure to crypto-assets being facilitated within the regulatory framework administered by ASIC…
We recognize the interest in, and demand for, ETPs and other investment products that hold crypto-assets in Australia. However, we are also aware of the real risk of harm to consumers and markets if these products are not developed and operated properly.”
According to ASIC, a cryptocurrency would qualify for an ETP only if it meets the following criteria:
- high level of institutional support and acceptance for investment purposes
- presence of service providers such as custodians, fund administrators, index providers and market makers willing to support and invest in the ETPs exposed to the underlying crypto asset
- a mature spot market
- existence of a regulated futures market linked to the crypto asset,
- the availability of transparent pricing mechanisms.
ASIC believes that only two cryptocurrencies currently on the market have a shot at meeting these requirements.
“We also stated that, in our view, the only crypto-assets that are likely to satisfy these factors at this point in time are Bitcoin and Ether.”
Australia’s top regulator adds that funds looking to launch Bitcoin or Ethereum ETPs must have a responsible entity who will “ensure crypto-assets are held in safe and secure custody.”
Eligible funds are also expected to carry out the trading of crypto assets on platforms that are subject to know-your-customer (KYC) and anti-money laundering and counter-terrorism financing (AML/CTF) obligations.
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