New Bitcoin ETF planned for South Africa

Sygnia is set to apply to the Johannesburg Stock Exchange (JSE) to list a new cryptocurrency exchange traded fund (ETF) in South Africa.

This is feedback from Sygnia CEO David Hufton, who was answering questions from MyBroadband about their plans in the cryptocurrency market.

A Bitcoin ETF tracks the price of the cryptocurrency and allows investors to buy into the digital currency without trading Bitcoin itself.

It also removes the complexities related to storing Bitcoin and moving money in and out of cryptocurrency exchanges.

Sygnia’s latest Bitcoin ETF plan follows an unsuccessful attempt in 2017 to list the world’s first cryptocurrency ETF on the JSE.

“Unfortunately, at the last minute, the JSE decided not to proceed citing a lack of a regulatory framework for cryptocurrencies as the reason,” Hufton said.

At the time John Burke, the JSE’s former director of issuer regulation, said the exchange was not ready to approve cryptocurrency listings.

He said the JSE had “concerns regarding the robustness and transparency of the various cryptocurrency spot markets”.

David Hufton
Sygnia CEO David Hufton

Sygnia’s Hufton said while the opportunity to launch the first cryptocurrency ETF in the world was sadly missed, they intend to reapply to the JSE any day now.

“A lot of work went into designing the actual structure of the ETF in 2017 which we can reuse,” he said.

“With cryptocurrencies becoming more mainstream, we are hopeful that the JSE will be more receptive to our application this time round.”

MyBroadband asked the JSE for feedback on allowing a cryptocurrency ETF on its platform, but the company did not reply by the time of publication.

The JSE’s director of issuer regulation, Andre Visser previously told Citywire there were “important conditions to be addressed before it allowed a cryptocurrency product listing”.

They will also have to engage with other regulatory bodies like the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB).

Sygnia is not the only company planning to launch a Bitcoin ETF on the JSE.

Earle Loxton
Earle Loxton

DCX Capital, which was founded by Earle Loxton and former CEO Michael Jordaan, is also planning to launch a Bitcoin ETF.

Speaking to Moneyweb, Loxton said they have partnered with Easy Equities to list a cryptocurrency ETF on the JSE.

“Through our partner, Easy Equities, we will be lodging our application to become the first listed South African Bitcoin ETF,” he said.

He said while they have not submitted their application yet, they were hard at work to ensure they have all the necessary measures in place for a successful ETF listing.

One of these measures was to ensure the safe storage of their cryptocurrency assets, which include the use of hardware wallets and web wallets.

To meet listing requirements, they need the services of a dedicated, trusted, and regulated custodian.

“This has been put in place through Easy Equities’ custodian services they employ in their business,” he said.

Kevin Brady
A2X CEO Kevin Brady

People questioned whether Sygnia can list its Bitcoin ETF on the A2X exchange if the JSE does not approve it.

Commenting on this issue, A2X CEO Kevin Brady explained that A2X’s licence conditions only allow for secondary listings.

“We’re unable to offer primary listings for now of any asset class,” Brady told MyBroadband.

“However, if a crypto ETF has a primary listing on regulated local exchange – or even on an A2X approved international exchange – we would most definitely consider secondary listing it on A2X.”

Now read: Why hedge fund manager Jean Pierre Verster is not investing in Bitcoin

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New Bitcoin ETF planned for South Africa