BlackRock executives met with the SEC’s crypto task force to discuss regulatory issues around crypto spot ETPs, with a focus on staking in ETFs.
BlackRock, SEC Set to Discuss Crypto ETPs, Staking Options
On Friday, executives from the US financial firm BlackRock convened with the crypto task force of the US Securities and Exchange Commission (SEC) to address various issues concerning cryptocurrency spot exchange-traded products (ETPs).
American interest in cryptocurrency is expanding, as evidenced by this conversation and other recent events in the US President Donald Trump‘s administration.
To “address several issues related to regulation in crypto assets,” BlackRock executives met with the SEC’s crypto task force, which is led by Commissioner Hester Pierce, according to a document issued by the agency on Friday. The two parties’ briefing specifically addressed ETF staking, a topic that has gained a lot of attention in recent months.
BlackRock wanted to discuss the Commission’s stance on staking and the possibility of allowing exchange-traded funds to include staking options.
A noteworthy rule amendment that would allow for staking in the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF was submitted by the New York Stock Exchange (NYSE) in February.
To increase the Trust’s revenue, Grayscale would be permitted to lock up a portion of the cryptocurrency assets in its ETF holdings if the SEC grants this application.
The SEC postponed deciding on this request until April. Despite the interim deadlines in May and August, Bloomberg analyst James Seyffart previously said there is a good chance the Commission will postpone approval until the final deadline in October.
The Chicago Board of Exchange (Cboe) has submitted a comparable request for the 21Shares Core Ethereum ETF in addition to Grayscale.
BlackRock, SEC To Explore Tokenization, ETP Standards
In addition to staking in ETFs, BlackRock and the SEC discussed how to advance securities tokenization while adhering to current federal securities regulations. Of particular note is the BUIDL token, a tokenized money market fund offered by BlackRock that invests in premium government assets like treasury bills.
Both parties also discussed the necessity of precise criteria to decide whether to accept or reject a cryptocurrency ETP. These criteria should consider the Exchange Act’s Section 6 provisions, guaranteeing that ETP trading can only occur on a regulated exchange.
BlackRock also suggested establishing an interim regulatory framework for ETP issuer activities while this framework was being created.
The last topic of discussion between the two sides examined the conditions for establishing positions and exercising restrictions on trading options for crypto ETPs, with an emphasis on how the liquidity of the underlying assets affects those limits.
