Edul Patel, the CEO and co-founder of Mudrex, an Indian cryptocurrency investment platform, said that institutional and retail investors in India will be able to purchase U.S. spot bitcoin (BTC) exchange-traded funds (ETFs).
“In a recent interview, Patel stated that this is much more valuable to institutions because retailers already had access to it.” While U.S. stock investing firms provide spot-bitcoin exchange-traded funds (ETFs) to retail consumers in the nation, Patel stated that “as far as we know,” we are the first in India to provide this service to institutions. “We are certainly the first Indian crypto platform to offer this service.” Mudrex will list four spot ETFs in the first phase: Vanguard, Fidelity, Franklin Templeton, and BlackRock.
Mudrex, a California-based company supported by Y-Combinator, has a subsidiary that is registered with the Indian Intelligence Unit. It holds licences in Lithuania and Italy, giving it a foothold in the European Union as well. The company’s Indian division will handle the spof-bitcoin ETF service, while the U.S. broker partners would handle the actual transaction processing, according to Patel.
The Reserve Bank of India (RBI), the country’s central bank, and the government, represented by the Finance Ministry, both have separate regulatory authority over cryptocurrencies, making this development unique. The RBI has been adamantly opposed to cryptocurrencies, and it recently declared that India’s economy cannot afford such risk, therefore it doesn’t need to adopt the same stance as the US regarding crypto ETFs. On the other hand, the Intelligence Unit of the Finance Ministry has registered over twenty-one Indian cryptocurrency service providers and levied high taxes on the industry. Although they both acknowledge the need to safeguard investors and the Indian economy, their regulatory approaches sometimes seem to diverge.
“The bitcoin spot ETF works as a security and Indians are allowed to purchase securities under the Liberalised Remittance Scheme (LRS) and, as a result, users or institutions specifically, who do want to get access to bitcoin can now start using the bitcoins through ETFs to diversify their portfolio,” Patel stated.
For Indians, investing overseas is made easier with the LRS. The Reserve Bank of India has set an annual maximum for the LRS of $250,000. Using its platform, Mudrex will allow users to invest in spot bitcoin ETFs for as little as $5,000 and as much as $250,000.
“The LRS is the tricky part for most people and over there (in the U.S.), because we also have strong banking relationships, we’re able to help users do these transactions in a very seamless way, and that’s why these services are important,” Patel stated. Additionally, Patel stated that roughly 20 of the 350 universities that the company works with have started the enrollment process, and he anticipates volumes with an average ticket size of $110,000.