Kazakhstan’s investment company Fonte Capital has announced the launch of the first spot exchange-traded fund for Bitcoin in Central Asia — the Fonte Bitcoin Exchange Traded Fund OEIC (BETF). Trading for the fund began on August 13 at the Astana International Exchange (AIX), and its shares are tickered as BETF.
This is reported by Business • Media
Features of the New Bitcoin ETF in Kazakhstan
BETF is a physically-backed fund: each share is backed by actual Bitcoin, which is stored by the American custodian BitGo Trust. The fund’s assets are insured for up to $250 million using cold offline storage and secure vaults. This approach minimizes the risks of loss or hacking.
The fund operates under the regulations of the Astana International Financial Centre (AIFC). According to representatives of the center, their mechanisms allow for the protection of assets from freezing due to international sanctions, as well as reducing dependence on foreign issuers. Furthermore, within the AIFC, there is already a legal framework for digital assets, enabling the regulation of licensed exchanges, custodians, and new financial products.
Kazakhstan — A Leader in Mining and Crypto Industry Development
The launch of BETF comes amid the active rise of Kazakhstan as one of the world’s leaders in Bitcoin mining following the ban on this activity in China in 2021. In 2022, the country entered the top three leading nations in terms of Bitcoin mining, attracting miners due to cheap coal energy and a favorable regulatory environment.
Unlike exchange-traded notes, BETF directly owns Bitcoin, allowing for precise tracking of the asset’s market value and minimizing counterparty risks. The fund’s structure allows for physical settlements and supports a low expense ratio.
Fonte Capital noted that BETF will provide investors with “a simple way to add Bitcoin to their portfolio while maintaining a high level of control and reliability.”
Investors both in Kazakhstan and abroad can purchase shares of the fund through the AIX exchange without the need to manage private keys or use cryptocurrency exchanges. Thus, the fund simplifies access to Bitcoin investment for a wide range of market participants.
Kazakhstan continues to actively integrate crypto assets into its economy by implementing a number of initiatives: legalizing crypto exchanges, creating an experimental zone called CryptoCity for transactions with digital assets, developing a concept for a crypto reserve, and considering the possibility of investing a portion of gold and foreign exchange reserves into the crypto market.