Monochrome Submits Application for Australia's First Fully-Licensed Spot Bitcoin ETF

An application for Australia's first fully-licensed spot Bitcoin ETF under new regulatory guidelines has been submitted to the Australian Securities Exchange (ASX).

Monochrome Asset Management, in partnership with Vasco Trustees, announced the updated application for the Monochrome Bitcoin ETF (IBTC), aimed at providing regulated exposure to retail investors.

This marks the first filing for a spot Bitcoin ETF on the ASX under a crypto-specific licensing regime established nearly two years ago. It follows a year after Vasco received a financial license to operate Bitcoin and crypto spot ETFs in Australia.

The Australian Securities and Investments Commission (ASIC) updated its rules for the Australian financial services (AFS) license in October 2021 to enhance market transparency and investor protections.

These rules require institutional support for the underlying Bitcoin and reputable service providers for approval.

Currently, only two AFS licensees, including Monochrome’s issuer, have authorization to offer retail crypto-asset licenses, while others are limited to wholesale offerings.

Last year, Cosmos Asset Management attempted to launch Australia's first Bitcoin ETF. However, this ETF was set up as a fund of funds, offering exposure to a Canadian spot Bitcoin ETF managed by Purpose.

Ultimately, Global X and 21Shares launched the first Bitcoin ETF in Australia, while Cosmos withdrew its offering in November due to insufficient interest.

The Global X 21Shares Bitcoin ETF, which remains active, uses a wholesale-retail feeder fund structure, where a retail fund invests in a wholesale fund that directly holds Bitcoin.

Those following the developments closely are debating which fund was truly the first spot Bitcoin ETF to launch in Australia.

JAN3 CEO Samson Mow highlighted the significance of the Monochrome Bitcoin ETF on X, stating that while it holds Bitcoin directly, it also offers in-kind creation and redemption for global investors directly, a feature not yet available in U.S. and Hong Kong ETFs.

However, Senior Bloomberg Analyst Eric Balchunas noted that Global X and 21Shares have had a spot Bitcoin ETF for two years, trading on CBOE, with VanEck awaiting approval to launch the first on ASX.

Monochrome CEO Jeff Yew emphasized that their Bitcoin ETF is distinct, being authorized under the "crypto-asset" licensing category, allowing the fund to hold Bitcoin directly. Yew expressed confidence in a favorable outcome.