India first exchange-traded fund ETF likely to launch in early 2020

Last year, the industry of cryptocurrencies saw a rollercoaster ride and many hope that they will continue to show strong, albeit volatile growth this year as well. The companies that offer these services are making an effort to woo this investor segment because new investors seem to be the strongest backers of the digital assets industry. Many of them are coming up with lucrative ways to tap the investors in the country. In the direction of Asia's first exchange-traded fundETF is likely to be launched in India soon.

A Memorandum of Understanding with the BSE's International Arm India INX has been signed by the Torus Kling Blockchain IFSC, a joint venture between Mumbai-based Cosmea Financial Holdings and Hyderabad-based Kling Trading India. This service will be available in GIFT City, a central business centre in Gandhinagar, Gujarat at the end of the fiscal.

An exchange-traded fundETF is a type of security that tracks an index, sector, commodity, or other assets. It can be traded on a stock exchange the same way a regular stock can.

The IFSC is a 50: 50 joint venture between Cosmea Financial Holdings and Kling Trading India.

ETFs like the one proposed by Torus Kling Blockchain and Kling Trading track returns from cryptocurrencies without being invested directly in the virtual coins.

The ETF is expected to be launched in a sandbox environment, which will help in live testing of the products for emerging risks and correct them before they can affect a large number of investors.

Once the ETF has received regulatory approvals, including from the International Financial Services Centre International Financial Services Centre IFSCA, Indian investors will be able to invest in it using the RBI's liberalised remittances scheme LRS route.

The exchange has asked for approval from the IFSCA.

ETFs allow traders to trade through regular investment accounts, bypassing the risks associated with criptocurrency exchanges.

The first two years of the service, Torus KlingBlockchain is aiming for $1 billion in assets.