Bitcoin News Today: Cboe and NYSE Arca Propose Streamlined Crypto ETF Listing Rules

Cboe BZX Exchange and NYSE Arca have submitted rule change proposals to the U.S. Securities and Exchange Commission to streamline the listing process for cryptocurrency exchange-traded funds. These amendments would allow eligible crypto ETFs to list without undergoing the lengthy and discretionary 19b-4 approval process, which has historically delayed product launches by up to 240 days [1]. The proposed changes aim to standardize the regulatory framework, enabling crypto ETFs to launch more efficiently under pre-approved conditions, similar to how traditional ETFs are treated [2].

Under the new rules, crypto ETFs would be required to meet specific eligibility criteria, such as a six-month track record of regulated futures trading for the underlying asset and a liquidity risk management plan for funds with more than 15% of assets not instantly redeemable [1]. These requirements apply to both spot and staking-enabled ETFs, offering greater flexibility in product design and potentially expanding the range of digital assets available to investors.

The proposals align with a broader regulatory push to integrate digital assets into the financial system. The SEC’s recent approval of in-kind redemptions for spot Bitcoin and Ethereum ETFs demonstrates a growing willingness to treat crypto funds like traditional financial products [1]. This shift is supported by a coordinated effort from the White House, which released a 168-page policy framework in late July urging agencies to adapt regulations for digital assets. The directive emphasizes efficient product rollouts and clearer standards for custody and registration [1].

Industry analysts have responded favorably to the proposed rule changes. Nate Geraci of ETF Store has highlighted the efficiency and standardization that the rule could bring, while Eric Balchunas of Bloomberg Intelligence has forecasted that multiple crypto ETFs could gain approval by the end of 2025 [1]. With Nasdaq reportedly considering similar submissions, the industry appears to be moving toward a consensus on the need for regulatory modernization.

The potential benefits extend beyond just speed. By reducing the time and cost associated with launching a crypto ETF, the rule could attract a broader range of issuers and lead to a more diverse set of investment products [1]. This could improve accessibility for both retail and institutional investors seeking exposure to digital assets in a regulated format. The increased availability of crypto ETFs is expected to enhance market liquidity and support broader adoption of cryptocurrencies.

Historically, the SEC’s case-by-case review process has created regulatory uncertainty and hindered product development in the crypto space. The proposed rule-based system seeks to establish clear and objective criteria for approval, creating a more transparent and efficient mechanism for market entry [1]. If adopted, the rule would not only benefit ETF issuers but also signal the SEC’s growing recognition of the legitimacy and maturity of the crypto market.

The next steps depend on the SEC’s evaluation of the proposal and its consideration of public and expert feedback. While the timeline remains uncertain, the momentum behind the proposal and industry support suggest that approval could be on the horizon [1]. If implemented, the new framework could transform the U.S. crypto investment landscape, making it easier for investors to access a broader range of digital assets and encouraging further innovation in the sector [1].

Source:

[1] CBOE Proposes Automatic Bitcoin ETF Listings to Potentially Streamline SEC Approval Process (https://en.coinotag.com/cboe-proposes-automatic-bitcoin-etf-listings-to-potentially-streamline-sec-approval-process/)

[2] Cboe, NYSE Arca move to streamline crypto ETF listings with SEC rule change request (https://www.mexc.com/news/cboe-nyse-arca-move-to-streamline-crypto-etf-listings-with-sec-rule-change-request/63016)