Grayscale Proposes Dogecoin ETF: A Meme Coin's Quest for Legitimacy

The U.S. Securities and Exchange Commission (SEC) has formally acknowledged a proposal by Grayscale Investments to convert its Dogecoin Trust into an exchange-traded fund (ETF). The SEC's review process for the 19b-4 filing, submitted by NYSE Arca, has not yet begun, as the 240-day window will only start after the Federal Register publication.

The filing outlines plans to transform the Grayscale Dogecoin Trust into an ETF that tracks the price of Dogecoin (DOGE) through the CoinDesk DCX index. The structure of the ETF will involve authorized participants handling cash rather than DOGE directly, a feature designed to address regulatory concerns.

Grayscale's proposal follows a similar framework to its previous crypto trust conversions, such as the one for XRP. The trust, established earlier this month, is an investment vehicle with limited liquidity and redemption options, while an ETF offers greater liquidity and real-time buying and selling on exchanges.

Coinbase Custody will handle the meme coins, while BNY Mellon will take on administrative duties. The trust will obtain pricing data from regulated U.S. trading platforms such as Coinbase, Kraken, and Crypto.com, which collectively handle most DOGE-USD trades.

For Dogecoin, which began as a joke crypto in 2013, SEC approval could lend legitimacy to its efforts and further boost its acceptance as a currency for goods and services. The filing highlights that over 2,500 merchants and retailers accept DOGE, including the Dallas Mavericks and AMC, and that it has been donated for various charitable purposes.