Bitcoin ETF Regulation
Our Chairman’s journey to crypto and gaining Bitcoin ETF regulatory approval
From early discussions, an opportunity arises
My career in finance spans 40 years across Europe, Asia and the UK before finally settling in the Channel Islands. I began as an accountant with Deloitte and PricewaterhouseCoopers then progressed onto various other financial companies with roles in Hong Kong, Singapore and Bangkok.
My final banking role was for Credit Suisse back in the UK. It was here that I first met Jacobi’s CEO and Founder, Jamie Khurshid. During our time working together, we discussed various innovative finance opportunities, returning to ideas and concepts at different times.
Jamie piqued my interest when he first started talking about the idea for Jacobi as I had been following blockchain and digital assets for several years. The reasons which inspired Jamie to set up the Jacobi Bitcoin ETF were the very reasons which had deterred me from getting involved in cryptocurrencies. It just sounded too uncertain, too risky.
“So when Jamie mentioned that he was intending to bring institutional structures to Bitcoin, I could see immediately how it could be a successful business”
Discovering Guernsey as an innovation hub
During my time in Guernsey, I have witnessed the ongoing recognition that the jurisdiction encourages innovation. Legal and financial sector specialists together with the local regulator manifested the island’s willingness to set up new structures in finance. Previous examples include Protected and Incorporated Cell Companies, Insurance Linked securities, the development of the captive insurance sector and a burgeoning investment fund sector including the recently launched Green Fund.
The Guernsey Financial Services Commission (GFSC) has always been willing to look at new ideas and take them forward, so we envisaged that cryptocurrency would be no different. After much preparation and planning, Guernsey has lived up to our belief that they would be the progressive regulator to support this next wave of financial innovation.
After receiving approval from the GFSC to launch the world’s first Tier 1 Bitcoin ETF, I often get asked by my more traditionally minded finance peers why Bitcoin. For my institutional investment contacts, the story is clear;
“Jacobi wants to clean up Bitcoin’s reputation. Bringing an asset that is very popular into the institutional framework so that it can be more accessible”
It helps to explain that we’ve put a structure around this asset that institutional investors and asset managers will understand, that they have used 100 times before with many other investment products.
All elements of the investment product are familiar to investors recognised and well-practised in the mainstream investment arena, the custodian, the market, the trading process, and how it is valued. The only innovative element is the underlying digital asset. Once this is understood, we get further buy-in into this investment opportunity.
The key to change is through understanding
The Jacobi Bitcoin ETF is specifically designed for institutional, professional and sophisticated investors. While some understand the digital assets market, many still ask questions about the different types of exchange-traded products available and how we are different. Our ambition as a fund is to provide informed educational content explaining how we deliver a straightforward Bitcoin spot ETF.
For those excited about Bitcoin, finding a simple, secure way into the market to base their trading strategy on comes down to the structure and familiarity. It’s about bringing in mainstream institutional products for a new asset class that deserves much wider adoption.
I am energised to be a part of this new future and bring my traditional finance counterparts on this compelling journey.