While the U.S. struggles to bring a spot bitcoin ETF to the market, Singapore is marching forward with a physical fund comprised of the leading cryptocurrency.
Bitcoin Magazine reports that Singapore-based fund manager Fintonia Group will offer a bitcoin and yield fund that will be government-regulated courtesy of the Monetary Authority of Singapore (MAS) — Singapore’s equivalent of the United States’ Securities and Exchange Commission (SEC). However, it looks like retail investors could be left out in the cold, as the funds are more tilted towards institutional investors.
This could certainly help appease detractors who are skeptical of a futures bitcoin fund because it doesn’t invest directly into the underlying asset. Many cryptocurrency purists would rather get direct exposure to the tokens of their choosing instead of futures contracts.
“The fund acquires ‘physical’ bitcoin, meaning we will buy the actual bitcoin [rather than] a derivative instrument on bitcoin,” said Adrian Chng, founder and chairman of Fintonia Group.
“As an MAS regulated fund manager with strict standards, we can connect with multiple exchanges and different market-makers, enabling us to find the best prices, as well as buy or sell at volume,” Chng added. “The fund also enables efficient cash or crypto transfers, resolving the challenges around moving large amounts of cash in or out of the system.”
As far as the yield fund is concerned, it would allow investors access to capital in order to purchase bitcoin via direct loans. The fund is aimed at traders or even miners who want to obtain cash without having to sell their bitcoin holdings.
“Bitcoin is an excellent form of collateral for loans,” Chng reportedly said. “It trades 24/7 and is highly liquid, with approximately $30bn to $60bn per day. If required, it can be quickly liquidated in comparison with, for example, commodities and real assets.”
Becoming a Global Crypto Hub
The green light by the MAS may not be surprising given that the country of Singapore is aiming to become a global cryptocurrency hub. It seems the government is taking a go-with-the-flow approach as opposed to other countries like China that have banned certain mining activities, forcing them to move elsewhere.
“We think the best approach is not to clamp down or ban these things,” said Ravi Menon, managing director of the MAS, in a Bloomberg article earlier this month.
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