Key Highlights
- In July, major US exchanges proposed generic listing standards for ETFs that are commodity- and crypto-based, which the SEC is expected to approve next month.
- This expected move could lead to faster approvals for a range of new products. A variety of fund shops, big and small, have recently filed for numerous new ETFs that would track memecoins, altcoins, and tokens.
Expectations for the Fall of Crypto
Investors who relished the ‘Summer of Crypto’ need not worry about the onset of fall. The leading U.S. securities regulator is expected to soon establish the terms for the launching of new crypto spot ETFs, potentially signalizing the beginning of a lot of new products. As early as late September, the Securities and Exchange Commission (SEC) could endorse new listing standards for commodity- and crypto-based exchange-traded products, providing a path to a variety of new offerings eagerly awaited by the industry.
Regulatory Updates
Presently, a few regulatory aspects are being dealt with, some of which might facilitate the approval process for others. Agreeing on the listing standards could accelerate approvals for exchange-traded funds based on cryptocurrencies like Solana (SOLUSD) and XRP (XRPUSD), whose regulatory processes have already started.
A slew of regulatory submissions in recent weeks illustrates the range of products investors might soon get access to. These products include Solana and XRP-based funds and also ones for ‘Trump coin’ (TRUMPUSD), Dogecoin (DOGEUSD), and even less known coins like staking token Jitosol (JITOSOLUSD).
New Rules, a Winning Streak for Crypto
In late July, NYSE Arca, CBOE BZX Exchange, and the Nasdaq proposed generic listing standards for commodity- and crypto-based exchange-traded products. If these rules are approved, funds based on certain coins would receive the same treatment as regular ETFs under the 1940 Act. Crypto ETFs have so far undergone a longer process that demands additional paperwork, referred to as 19b-4 applications when asking the SEC for the green light to launch digital assets ETFs.
This procedure has, for years, hindered the launch of new digital asset funds. Tyler and Cameron Winklevoss, the twin brothers, first sought to release a Bitcoin ETF as early as 2013, and numerous fund shops have done the same, but it took nearly a decade to approve a spot Bitcoin ETF. Others have been approved progressively.
Generic Listing Standards: A Win for Crypto
Generic listing standards would represent a win for crypto as they would allow ETF shops to incorporate more coins into this popular investment vehicle. However, it would not offer a crypto-specific framework which would provide information on which coins the SEC would allow or disallow based on aspects like their utility or size, for example.
