The Ontario Securities Commission (OSC) approved what has been acclaimed as the first Bitcoin exchange-traded fund (ETF) in North America.
A document published on official local public security documents repository Sedar reveals that the OSC approved the Purpose Bitcoin ETF for British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut. Purpose Investments, the firm behind the newly-approved product, quoted its CEO and founder Som Seif in an announcement published on Friday:
Bitcoin has been gaining popularity among individual and institutional investors for years now, however it remains a difficult asset to gain efficient and secure exposure to. [...] Purpose Bitcoin ETF will change the landscape for investors by giving them a simple, efficient and affordable way to directly access the cryptocurrency.
Purpose Investments claims that this product "will be the first in the world to invest directly in physically settled Bitcoin, not derivatives." The asset is meant to allow investors to access Bitcoin without custody risks while—not unlike physically backed gold or silver ETFs—always being backed by the underlying physically settled Bitcoin holdings. Seif said that the OSC collaborated closely with Purpose Investments to allow for the launch of this product:
The OSC was a crucial working partner in the launch of Purpose Bitcoin ETF and we are grateful for their willingness to work with us through this process. Their cooperation and guidance made it possible for us to move forward on getting this novel ETF into the hands of investors.
Gemini Trust Company, the custody arm of United States crypto exchange Gemini, will hold the bitcoin backing the ETF while the Canadian Imperial Bank of Commerce's Mellon Global Securities Services Company will serve as the fund's administrator. The ETF's daily net asset value will be based on the daily spot price of the XBX Index provided by institutional trading tool service TradeBlock.
While many companies attempted and failed getting approval for a Bitcoin ETF over the past years, it looks like the genie is out of the bottle and more rapid development is coming for the space. Australian news outlet Financial Review reported earlier today that Australian Securities and Investments Commission commissioner Cathie Armour told the Senate select committee on financial technology that the regulator is open to approving a Bitcoin ETF.