Executives of American investment firm BlackRock met with the US Securities and Exchange Commission (SEC) ‘s crypto task force on Friday to discuss various matters pertaining to cryptocurrency spot exchange-traded products (ETPs). This discussion, among other recent developments in the administration of US President Donald Trump, represents the growing American interest in the crypto industry.
BlackRock And SEC Speak On Staking In ETFs – Incoming Approval?
According to a memo released by the SEC on Friday, BlackRock representatives met the agency’s crypto task force, headed by Commissioner Hester Pierce, to “address several issues related to regulation in crypto assets.” In particular, the briefing between both parties touched on staking in ETFs, which has become a major talking point in recent months.
In particular, BlackRock sought to discuss the Commission’s perspective on staking and the potential for permitting exchange-traded funds with staking options.
Notably, the New York Stock Exchange (NYSE) filed for a proposed rule change in February that will introduce staking in the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF. If the SEC approves this application, Grayscale would be allowed to lock up portions of the crypto assets in its ETF holdings to generate additional income for the Trust.
In April, the SEC delayed a decision on this request. Bloomberg analyst James Seyffart previously stated there is much potential for the Commission to hold approval until the final deadline in October, despite the intermediate deadlines in May and August. In addition to Grayscale, the Chicago Board of Exchange (Cboe) has also filed a similar request for the 21Shares Core Ethereum ETF.
Tokenization, Crypto ETP Approval Standards, Others
Aside from staking in ETFs, BlackRock and the SEC also conversed on ways of advancing the tokenization of securities in line with existing federal securities laws. Notably, BlackRock offers the BUIDL token, which is a tokenized money market fund that invests in high-quality government securities such as treasury bills.
Furthermore, both parties also discussed the need for clear standards that determine the rejection or approval of a crypto ETP, which would also consider the provisions of Section 6 of the Exchange Act that ensure ETP trading will only happen on a regulated exchange. While this framework is being drafted, BlackRock also proposed the creation of a temporary regulatory system for ETP issuer activity.
The final talking point between both parties explored the requirements for setting positions and exercise limits on crypto ETPs trading options, with a focus on how the liquidity of the underlying assets influences those limits.
At presstime, the total crypto market is valued at $3.22 trillion following a 1.19% gain in the past day.
Featured image from Politico, chart from Tradingview
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