Even with confusion over the regulatory landscape and no clear messages from the government, India might launch the first cryptocurrency exchange-traded fund (ETF) in Asia this year.

Cosmea Financial Holdings, based in Mumbai, will launch the product in a joint venture with Kling Trading India, located in Hyderabad. It is expected to launch India's first crypto ETF by the end of this fiscal year.

Mr. Krishna Mohan Meenavalli, CEO of Torus Kling Blockchain IFSC, remarked that “ETFs allow trading through regular investment accounts, bypassing the hassle and security concerns of cryptocurrency exchanges.”

A Memorandum-of-Understanding (MOU) has already been signed with BSE's international arm India INX regarding the launch of India's first Bitcoin and Ethereum futures exchange-traded fund (ETF).

GIFT City's International Financial Services Center will offer crypto-based products for trading, which is the planned central business district in Gandhinagar, Gujarat.

This will be launched in a "sandbox" arrangement that is intended to provide an environment where regulated firms can launch and test their products in a safe and controlled environment.

There has been no concrete decision on cryptocurrency regulation by the Indian parliament for several years, which has delayed making concrete decisions. But, crypto-related product institutional investment options are steadily expanding in India.

India is expected to introduce a crypto bill in February's budget session. Industry leaders and investors hope to see a positive change.

So why cryptocurrency ETF?:

An investor can track cryptocurrency returns with a cryptocurrency ETF without having to own the digital tokens themselves, which eliminates the hassles and uncertainties associated with traditional cryptocurrency exchanges.

According to global estimates, the annual derivatives trading volume for cryptocurrencies stands around $3.2 trillion, whereas the spot volume is roughly $2.7 trillion.

Pavan A

CBW - External Analyst

INDIA