‘The only crypto-assets likely to satisfy these factors are Bitcoin and Ether’

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The Australian financial authorities are seeking public opinion on cryptocurrency-based exchange-traded products [ETPs] as demand for these products surges. The Australian Securities and Investment Commission [ASIC] issued a document on Wednesday titled, ‘crypto-assets as underlying assets for ETPs and other financial products.’

As per the report, the product has varied features and risks that the market participants and product issuers must be aware of. The regulators noted its top priority was to assess the “unique and ever evolving features” of ETPs that could consistently meet the existing regulatory norms.

Noting the complex nature of the product and the changing industry, the regulators deemed it important to consult, especially to assess important issues at stake. The document outlined them as:

“(a) whether these products can meet existing expectations for ETPs, including whether crypto-assets are appropriate underlying assets, whether crypto-assets can be reliably priced, and how crypto-assets should be classified with respect to underlying asset rules; and (b) how product issuers can ensure these products are compliant with our regulatory framework, including with respect to custody, risk management and disclosure.”

Apart from detailing concerns, ASICs also indicated that it did not consider all crypto assets were capable to serve as underlying assets for an ETP. However, it was open to approving a crypto asset that could meet all its relevant criteria for assessment.

“At this point in time, in our view, the only crypto-assets that are likely to satisfy these factors are bitcoin (BTC) and ether (ETH).”

This news from the land down under comes at a time when the world’s regulators are tightening their grip on the crypto industry. This initiative by the ASIC might have been inspired by the listing of Ethereum ETP on the Toronto Stock Exchange along with the ongoing consideration by the Australian Securities Exchange [ASX] of several crypto ETP applications. With Australia turning to citizens for opinion, the country may be able to avoid the chaos generated by unclear regulations. This would also help businesses and investors to understand and participate in cryptocurrency adoption.

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