Monochrome revises spot bitcoin ETF application in Australia

This development represents the first filing for a spot bitcoin ETF on the ASX since implementing a licensing regime with crypto provisions nearly two years ago.

The move comes a year after Vasco, Monochrome’s partner, obtained a financial license to operate crypto spot ETFs in Australia.

ETFs allow investors to gain exposure to various assets without owning them directly, including commodities, currencies, stocks, or bonds. In the case of a bitcoin ETF, investors can participate in the price movement of bitcoin without possessing the cryptocurrency itself. Instead, they can purchase shares that mirror the digital asset’s value.

In October 2021, the Australian Securities and Investments Commission (ASIC), the country’s securities regulator, revised its rules for the Australian financial services (AFS) license to enhance market transparency for crypto firms and improve investor protection.

These regulations stipulate that a spot ETF requires institutional support and acceptance of the underlying cryptocurrency. Additionally, “reputable” and “experienced” service providers must be willing to back such products.

Presently, only two AFS licensees, including the issuer partnering with Monochrome for the ETF, are authorized to offer retail crypto-asset licenses. Other licensees are classified as wholesale and are yet to receive approval to provide these products to individual investors.

Previous Australian attempts at bitcoin ETFs

Last year, Cosmos Asset Management’s bitcoin ETF attempted to become the first in Australia. Still, it was established as a fund of funds, offering exposure to a Canadian spot bitcoin ETF managed by Purpose.

Eventually, Global X and 21Shares’ bitcoin ETF became the first to list in Australia, while Cosmos delisted its offering due to a lack of interest.

Spot bitcoin ETF applications have recently garnered significant attention, particularly in the US. In recent weeks, major financial firms such as Fidelity, Invesco, Wisdom Tree, Valkyrie, and BlackRock, a $10 trillion asset management firm, have filed for spot bitcoin ETFs.

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