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CBI approves QIAIF exposure to cryptocurrency as Irish domiciled funds surpass €4trn

31 March 2022
  • Central Bank of Ireland approves, in principle, QIAIFs with a low level of exposure to cash settled Bitcoin futures, the first type of indirect crypto exposure approved for a QIAIF
  • Assets in Irish domiciled funds surpassed €4 trillion for the first time in 2021
  • Irish domiciled ETF assets represent 66 per cent of the total European ETF market.

The Central Bank of Ireland (CBI) has advised Irish Funds that they have approved in principle a Qualifying Investor Alternative Investment Fund (“QIAIF”) with a low level of exposure to cash settled Bitcoin futures traded on the CME. This is the first type of indirect crypto exposure approved for a QIAIF. For the time being, QIAIFs which propose exposure to crypto assets are required to make a submission to the Central Bank as set out under their Q&A. The Central Bank’s approach in relation to crypto assets will be kept under review and will continue to be informed by European regulatory discussions.

This news comes as Irish Funds today hosts its London Alternative Investment Seminar.

The funds industry in Ireland continues to grow, with data from the CBI as end of December 2021, showing assets in Irish domiciled funds surpassing €4 trillion for the first time, a 22.5 per cent growth across all funds, with a growth of 42.1 per cent in exchange traded funds (ETFs). In 2021 total net sales into Irish domiciled funds reached €310.37 billion, of which €131.3bn has been into ETFs. This represented more than 80 per cent of all the net sales into European ETFs, which stood at €161bn for the year. Ireland continues to be the leading European domicile for ETFs, with Irish domiciled ETF assets representing 66 per cent of the total European ETF market.

Today, Ireland is the domicile for 5.95 per cent of worldwide investment fund assets, making it the third largest centre in the world. The total number of Irish domiciled funds, including sub-funds, reached 8,363 in December 2021, up from 7,962 in December 2020. Sectoral growth has been buoyed by strong inflows and a favourable economic environment, as global economies continue to recover from the Covid-19 pandemic.

Pat Lardner, Chief Executive at Irish Funds said: “The latest notice that the Central Bank of Ireland have approved, in principle, indirect crypto exposure for a QIAIF is a welcome first for the industry in Ireland. Irish Funds will continue to monitor developments and contribute actively to the policy discussions and innovations in this area. This news comes as the funds and asset management industry in Ireland continues to grow, cementing Ireland’s reputation as a key strategic investment fund location by the world’s leading asset managers, supported by our global reach, proven expertise, full market access to the EU and a supportive business environment.”

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