The Australian Securities Exchange (ASX) has received its first fully-licensed spot Bitcoin ETF application under new regulatory guidelines. This historic filing has been submitted by Monochrome, a Bitcoin-focused asset management firm, in conjunction with Vasco Trustees. The proposed Monochrome Bitcoin ETF (IBTC) is intended to provide regulated exposure for retail investors.
This marks a significant milestone as it’s the first instance of a spot filing on the ASX under a licensing regime that includes crypto provisions, established nearly two years ago.
New Rules and Regulations
In October 2021, ASIC, Australia’s securities regulator, revised its rules for the Australian financial services (AFS) license. The new rules aim to enhance transparency in the crypto market and strengthen investor protections.
The regulations stipulate that for a spot to be approved, institutional support and acceptance of the underlying crypto is essential. Moreover, service providers backing these products should be “reputable” and “experienced.”
Currently, only two AFS licensees, including Monochrome’s ETF issuer, hold any retail crypto-asset license authorization. Other licensees are listed as wholesale, indicating they are not yet approved to offer these products to retail investors.
Other Attempts at Bitcoin ETFs in Australia
Australia has seen other attempts at launching Bitcoin ETFs. Cosmos Asset Management tried to establish the country’s first ETF last year. However, their ETF was a fund of funds, offering exposure to one of Canada’s spot Bitcoin ETFs managed by Purpose.
Global X and 21Shares’ Bitcoin ETF became the first to list in Australia, while Cosmos delisted its offering in November due to a lack of interest.
How Monochrome’s ETF Differs
Unlike other fund structures, the Monochrome Bitcoin ETF is authorized under the ‘crypto-asset’ licensing category. “What sets us apart from other fund structures is that the Monochrome Bitcoin ETF is authorized under the ‘crypto-asset’ licensing category, which allows the fund to hold bitcoin directly on the fund level,” said Jeff Yew, Monochrome CEO.
Yew is optimistic about the outcome of their application. He attributes the poor performance of Australia’s spot Bitcoin ETFs to unfavorable market timing, confusion about the fund’s licensing, and operational issues. He believes that the current climate presents different circumstances and product structure/licensing.
