Here we are, once again, talking about crypto exchange-traded funds (ETFs), as a new ETF could soon be accepted in Japan, proving how quickly cryptocurrencies are making progress around the World.
A member of the Japan Financial Services Agency, the Japanese equivalent of the SEC, revealed to the media that the regulator is examining the interest of institutional investors towards crypto-based exchange-traded funds. The local authorities would then resume the debate on the approval of financial instruments linked to cryptocurrencies, after barring the way, just a month ago, to a reform that would have allowed the launch of derivatives such as futures contracts on Bitcoin and options on Ether. In case of a positive response from the regulator, it will then be up to the Japanese Liberal Democratic Party, which, according to the majority, might present a proposal during the current session of the National Diet (the Japanese parliament) ending in March, which would then become law as soon as in 2020.
If these rumors are true, it seems clear that the hype about crypto ETFs has involved Japan as well, even if until recently it seemed to be phenomenon restricted to the West. If confirmed, the acceptance of the crypto ETF by the Japanese FSA will undoubtedly represent a positive sign, marking a new chapter in the process of scrutiny and legitimation of the entire sector. Last year, the US Securities and Exchange Commission (SEC) rejected several proposals regarding ETFs on Bitcoin and, by the end of February, it should rule on a fund prepared by VanEck and SolidX and intended for trading on the Chicago Board Options Exchange. Many consider the possible approval of this particular Japanese crypto ETF as a decisive watershed for the fate of the entire cryptocurrency market (whose capitalization has contracted by over 85%, compared to a year ago).
In the meantime, last November, an index fund linked to a basket of five cryptocurrencies was launched on the SIX Swiss Exchange in the form of an exchange-traded product (ETP) and currently registers daily exchanges of around one million dollars. The startup Amung AG has, in fact, received permission from Switzerland to list a fund, made up in the following way: approximately less than half of the assets of the ETP will be invested in Bitcoin and the rest will be divided between Ripple (XRP for 25.4%) , Ethereum (ETH for 16.7%), Bitcoin Cash (BCH for 5.2%) and Litecoin (LTC for 3%). The fund in question will have an annual management fee of 2.5%. The Amun ETP will offer institutional investors, for now mostly limited to equity investment strategies, exposure to the cryptocurrency market. It will also provide access to such marker to so-called “retail investors”, who often encounter impediments due to local regulations.
Finally, we should keep in mind that an ETN (exchange-traded note) on Bitcoin has been available on the Swedish market since 2015.
This all sounds like an omen. In fact, it should not be too much of a surprise if, after Stockholm and Zurich, Tokyo will be the next one to rule in favor of crypto ETFs, instead of Chicago.
By Eloisa Marchesoni.
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