With the beginning of 2022, new opportunities for crypto sector growth are flooding into India as the Indian government considers its position on cryptocurrencies. Torus Kling Blockchain IFSC and India INX have reportedly signed a memorandum of understanding (MoU) to develop the first Bitcoin and Ethereum futures exchange-traded fund (ETF) outside of the United States. India INX is the country's first international stock exchange platform, while Torus Kling Blockchain is a joint venture between Cosmea Financial Holdings and Kling Trading India.
According to sources, the MoU divides the responsibility for the launch of India's ETF into three parts: India INX will be the trading platform, Cosmea Financial Holdings will handle distribution, and Kling Trading will be the technological partner.
ETF futures in India will allow more people to experiment with cryptocurrency without putting their money or assets at risk.
After receiving clearance from the International Financial Services Centres Authority (IFSCA) and other applicable regulatory organisations, they are expected to be launched by the end of this fiscal year.
V. Balasubramaniam, Managing Director and CEO of India INX, was reported by IndiaInfoLine as saying, "We would be releasing products in these new age assets in total conformity with the extant laws after acquiring all requisite regulatory clearances."
What Are Exchange Traded Funds?
ETFs are financial products that are regulated and can represent a wide array of different assets. An ETF keeps track of the price fluctuations of an underlying asset like Bitcoin or Ethereum, giving people an alternative to extract profits from the price trend without really owning even one unit of the asset.
ETFs are a type of price-tracking trading contract entered into by two parties.
Both the parties agree to purchase or sell assets at a predefined price at a later date.
The final day price of the underlying asset of the ETF – more or less – cannot influence this contract and one party ends up making a profit, a report by CoinDesk explained.
Other than removing the cost and requirement of storing an asset, Future ETFs makes the commodity easier to buy and trade.
In addition, the margin of profits that one of the parties getting into a contract can extract can be of high magnitudes.
On October 19, 2021, the first Bitcoin futures ETF was launched at the New York Stock Exchange, spelling out a moment of validation for the budding crypto space.
At the time, the valuation of Bitcoin had risen to $64,476 (roughly Rs. 48,51,174), close to its last attained all-time high of $68,000 (roughly Rs. 50.3 lakh) per token surrounded by excitement among crypto enthusiasts.
