The Australian Securities and Investments Commission (ASIC) has released a set of guidelines for crypto-backed exchange-traded funds (ETFs) in Australia, which could mean Australians will be able to trade bitcoin (BTC) and ethereum (ETH) ETFs in the coming months.
The new guidelines from the Australian regulator mean that ETFs that hold cryptocurrencies or related assets, such as shares of crypto mining companies, will be allowed to go live on the local stock market.
Under the new guidelines, companies interested in bringing crypto ETFs to the market will be required to adhere to a set of best practice guidelines, with custody of the digital assets highlighted as a key element.
Further, the regulator expects firms bringing ETFs to the market to design compensation schemes for investors should the firms’ digital assets be lost or stolen.
The guidelines also said that it will be up to “market operators,” such as the Australian Securities Exchange (ASX), to assess which digital assets are acceptable for an ETF. Among the criteria that should be considered for such an assessment were institutional support, the number of reputable service providers that exist, and whether a regulated futures market exists.
At present, only bitcoin and ethereum would fit these criteria, given that they are the only two cryptoassets with a regulated futures market on the Chicago Mercantile Exchange (CME). However, ASIC noted that it expects the number of assets that fit the criteria to grow over time.
“The good practices we published provide practical examples of how these obligations may be met, in a way that maintains investor protections and Australia’s fair, orderly and transparent markets,” ASIC Commissioner Cathie Armour said.
The approvals today follow news from earlier this week that crypto ETFs could be ready in Australia as early as mid-2022, provided that regulators gave the green light, and that a number of Australian firms were already preparing such an offering.
Moreover, the green light from the regulator today comes less than two weeks after Australian Liberal Senator Andrew Bragg tabled a major new package of crypto reforms in Australia’s parliament.