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Mumbai-based Cosmea May Launch Asia’s First Crypto Exchange Traded Fund

The first cryptocurrency exchange-traded fund (ETF) in Asia may be launched in India this year, despite the 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 venture, named Torus Kling Blockchain IFSC, stated that it would launch India’s first crypto ETF by the end of the current financial year.

According to reports in local media on Jan. 14, the two firms signed a memorandum of understanding with the Bombay Stock Exchange’s international arm, India INX.

The crypto-based product will be traded on GIFT City’s International Financial Services Centre (IFSC). 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 be launched in a sandbox environment that allows regulated firms to launch and test products under strict conditions. The new ETF has yet to receive full regulatory approval, and Indian policymakers have been known to procrastinate. India INX’s managing director and CEO, V. Balasubramaniam, said that the exchange has already made an application to 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 remittance scheme” channel. Under the scheme, which was launched by the central bank in 2004, residents are permitted to remit up to $25,000 per year for investment and other purposes.

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

Institutional investment options for crypto-related products are slowly expanding in India. Earlier this month, Cryptowire launched India’s first crypto index tracking the top 15 digital assets across global exchanges.

India Still Waiting on Regulation

The cryptocurrency industry is still under review by the Indian parliament, which has dragged out making concrete regulatory decisions for several years.

The founder of one of India’s largest exchanges WazirX, Nischal Shetty, commented that 2022 will be the year of regulation while speaking to 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 the government authorities to clarify the ambiguity we face with regards to taxation and compliance related instructions might be prioritized this year,”

The Indian government has been working on a crypto bill that was due for presentation in November. Industry leaders and investors alike are hoping it will see the light in February’s budget session.

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