China is paving the way for its first ETF backed by blockchain-related stocks as the China Securities Regulatory Commission (CSRC) has accepted an application for the issuance of a blockchain exchange-traded fund (ETF).
This is coming in the light of the United States hesitating to approve any crypto-backed exchange-traded funds (ETFs)
The application was accepted precisely on Tuesday 24th Dec. filed by Penghua Fund, an asset management company based in China’s Shenzhen city.
Although it is currently not known when a response will come but the Chinese blockchain community is on the lookout.
However, if the application for the ETF is approved, it will become the first blockchain investment instrument available publicly.
The proposed ETF aims to track and reflect the performance of Shenzhen-listed public stocks that have businesses in the blockchain industry.
The ETF as reported will also be open to the public without any restrictions, like other available stocks in the market.
What is an Exchange-Traded Fund
An exchange-traded fund (ETF) is a type of security that involves a collection of securities such as stocks that often tracks an underlying index.
ETFs are similar to mutual funds; however, they are listed on exchanges and the exchange-traded-fund shares trade throughout the day just like an ordinary stock.
With lower fees, increased liquidity, and transparency of operations, the exchange-traded-fund offers individual investors the purchase of shares in the funds.
China’s support for the Blockchain
The adaptation of blockchain technology by China’s mainstream players started after Chinese President Xi Jinping, gave a speech in which he boosted the nascent technology and urged the country to capitalize on it.
This also allowed many other investors look to invest crypto in China as crypto was already banned by the Chinese government.
As a result of these authorities in charge had to come out to explain the differences between blockchain and crypto.
Over 500 blockchain projects have been registered by the cyber administration of China.
As part of the landmarks to be achieved, China is working on its own central bank digital currency (CBDC) and is ready to test the currency with financial and telecommunication companies in China.
Featured image from: bitcoinist