Asia’s first cryptocurrency exchange-traded fund (ETF) could launch in India this year, despite ongoing regulatory confusion and mixed messages from the government.
The product will be launched as a joint venture between Mumbai-based Cosmea Financial Holdings and Hyderabad-based Kling Trading India.
The firm, named Torus Kling Blockchain IFSC, said it would launch India’s first crypto ETF by the end of the current fiscal year.
According to local media reports on January 14, the two companies signed a memorandum of understanding with the international arm of the Bombay Stock Exchange, India INX.
The crypto-based product will be traded on the International Financial Services Center (IFSC) in GIFT City. Gujarat International Finance Tec (GIFT) City is a planned central business district in Gandhinagar in Gujarat.
Approval and sandbox first
The Torus Kling crypto futures ETF will launch in a sandbox environment that allows regulated companies to launch and test products under strict conditions. The new ETF has yet to receive full regulatory approval, and Indian policymakers are notorious for dithering. India INX Managing Director and CEO V. Balasubramaniam said the exchange has already filed an application with the IFSC Authority under the regulatory sandbox.
Once approved, Indian investors will be able to gain exposure to the fund using the Reserve Bank of India’s “liberalized funds transfer system” channel. Under the program, launched by the central bank in 2004, residents are allowed to contribute up to $25,000 a year for investment and other purposes.
Torus Kling Blockchain IFSC CEO Krishna Mohan Meenavalli said that “ETFs allow trading through regular investment accounts, bypassing the hassles and security issues of cryptocurrency exchanges.”
Institutional investment options for crypto-related products are slowly growing in India. Earlier this month, Cryptowire launched India’s first crypto index by tracking the top 15 digital assets on global exchanges.
India still awaits regulation
The cryptocurrency industry is still under scrutiny by the Indian parliament, which has dragged on for several years to make concrete regulatory decisions.
The founder of one of India’s largest exchanges WazirX, Nischal Shetty, said that 2022 will be the year of regulation during an interview with local media earlier this week:
“We will see new trends in 2022 for crypto globally and in India as we deliberate on the regulatory framework and wait for government authorities to clarify the ambiguity we face with regards to taxation and related instructions. to compliance could be a priority this year”,
The Indian government is working on a crypto bill which was due to be introduced in November. Industry executives and investors hope that will see the light of day in the February budget session.
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