Torus Kling Blockchain IFSC, a similar joint venture between Sam Ghosh-promoted Cosmea Financial Holdings and Kling Trading India, has entered into an MoU with India INX to launch the country’s first Bitcoin and Ethereum futures exchange-traded fund (ETF). MoU) has been signed. These funds will be first cryptoFutures ETFs backed outside the US.
As per the MoU, India INX will be the trading platform and Cosmi Financial Holdings will be the distributor, while Kling Trading will be the technology partner.
Cosmea, promoted by former Reliance Capital CEO Sam Ghosh, has applied to the Reserve Bank of India (RBI) for a small finance bank (SFB) license and is awaiting regulatory approval.
India INX, the international arm of BSE, commenced trading activities on 16 January 2017 and is the first international exchange in India established in GIFT IFSC.
Torus Kling Blockchain IFSC will be the liquidity provider to India INX by providing round the clock liquidity with smart order routing.
The ETF futures are expected to launch by the end of this financial year under the sandbox creation of the International Financial Services Centers Authority (IFSCA). The launch of the products is subject to IFSCA and other regulatory approvals.
“The new asset class is just the tip of the iceberg. Exchange trade products allow trading through regular investment accounts bypassing the hassle and security concerns of cryptocurrency exchanges,” said Krishna Mohan Meenavalli, CEO, Torus Kling Blockchain IFSC.
In addition to digital assets, Gift City startup Metaverse is also launching a US-listed large-cap discount certificate. According to the company, these will be the first Asian discount certificates tracking Metaverse large-cap stocks in the US and Europe markets.
Torus is targeting $1 billion in assets under management (AUM) over the first two years from clients participating in blockchain-backed products through Kling blockchain ETFs and discount certificates.
According to the company, these goals are based on obtaining regulatory approvals to launch these products.
“India INX at GIFT IFSC is looking into the launch of digital asset-based products and has already applied under the regulatory sandbox to IFSC. This is a part of our product innovation initiative to benchmark offerings along with other international finance hubs, said V. Balasubramaniam, India INX Managing Director and CEO.
While SEBI has blocked crypto-based funds being offered in the Indian market, IFSCA regulates products in International Financial Services Centers (IFSCs) such as GIFT City.
According to the report, the global derivatives trading volume for the cryptocurrency market totaled $3.2 trillion, while the total spot volume stood at $2.7 trillion.
As of now, Indian residents having net worth of at least $1 million during the previous financial year are allowed to invest in offshore funds listed in IFSC. However, according to the Liberalized Remittance Scheme (LRS) of the Reserve Bank of India, banks can freely allow remittances of up to $250,000 per fiscal year by resident individuals to make investments abroad.
However, Indian residents are not allowed to invest abroad in futures, derivatives and crypto products.
“Bringing futures and launching a crypto ETF will attract a lot of LRS markets to GIFT City as the ETF allows people to interact with digital assets via digital media,” Meenavalli said.
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