The United States Securities and Exchange Commission (SEC) is currently weighing the approval of 12 spot Bitcoin exchange-traded fund (ETF) applications. It is reported that the SEC has a “window” to approve these applications starting from November 9th. This includes the conversion of Grayscale Investments’ Grayscale Bitcoin Trust product. However, even if the SEC were to approve the spot Bitcoin ETFs by November 17th, it may still take over a month before these products can be launched.
The expected delay in the launch of Bitcoin ETFs following SEC approval can be attributed to the two-step process involved in launching such funds. To commence a Bitcoin ETF, an issuer must obtain approval from the SEC’s Trading and Markets division on its 19b-4 filing. Additionally, it must also receive approval from the Corporate Finance division on the S-1 filing or prospectus. Among the 12 Bitcoin ETF applications, nine issuers have revised their prospectuses to show communication with the Corporate Finance division.
Furthermore, Nasdaq has filed the 19b-4 form on behalf of BlackRock, a $9 trillion asset management firm. This filing is for a proposed ETF called the iShares Ethereum Trust. By filing this form, BlackRock is signaling its intention to expand its crypto ETF aspirations beyond Bitcoin. It is worth noting that the company has already registered the corporate entity iShares Ethereum Trust in Delaware. Apart from BlackRock, several other firms, like VanEck, ARK 21Shares, Invesco, Grayscale, and Hashdex, are also seeking SEC approval for spot Ether (ETH) ETFs.
U.S. Representatives Zach Nunn and Abigail Spanberger have jointly introduced the Creating Legal Accountability for Rogue Innovators and Technology Act of 2023, commonly known as the CLARITY Act of 2023. This legislation aims to impose a ban on federal government officials from doing business with Chinese blockchain companies. Specifically, it prohibits government employees from using the underlying networks of Chinese blockchain or cryptocurrency trading platforms.
Additionally, the act explicitly forbids U.S. government officials from engaging in transactions with iFinex, the parent company of USDT issuer Tether. The introduction of this act signifies the government’s commitment to maintaining legal accountability in the rapidly evolving field of blockchain technology.
In a promising development, 47 national governments have pledged to “swiftly transpose” the Crypto-Asset Reporting Framework (CARF) into their domestic law systems. CARF is an international standard for the automatic exchange of information between tax authorities, stemming from a mandate given by the G20 in April 2021. This framework requires the reporting of cryptocurrency and digital asset transactions, whether they occur through intermediaries or service providers.
The authors of the joint pledge intend to activate exchange agreements for information exchanges by 2027. This commitment demonstrates the global effort to establish a transparent and accountable system for crypto-asset reporting.
The European Banking Authority (EBA), the European Union’s banking watchdog, has put forth new guidelines aimed at stablecoin issuers. These guidelines propose minimum capital and liquidity requirements that stablecoin issuers must meet. Under the proposed liquidity guidelines, stablecoin issuers must provide any stablecoin backed by a currency that is fully redeemable at par to investors.
The EBA believes that implementing stress tests through liquidity guidelines will help identify any shortcomings or lack of liquidity for stablecoins. This initiative aims to ensure the stability and reliability of stablecoin offerings in the European Union.
The potential approval of Bitcoin ETFs by the SEC brings great promise to the cryptocurrency market. The two-step process involved in launching ETFs and the active communication between issuers and the SEC indicate progress in this regard. Additionally, legislative efforts such as the CLARITY Act of 2023 contribute to establishing a legal framework for blockchain technology. The joint pledge to adopt CARF reflects a commitment to transparency in crypto-asset reporting. Lastly, the proposed guidelines by the EBA aim to ensure the stability of stablecoin offerings in the European Union. Collectively, these developments point towards a bright future for cryptocurrency investments and the broader adoption of blockchain technology.
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