SEC Greenlights Crypto ETF Generic Listing Standards in Landmark Vote

Key Takeaways:

• The Securities and Exchange Commission (SEC) approved crypto ETF generic listing standards for Nasdaq, Cboe, and NYSE.
• This creates a rules-based system, so each new exchange-traded fund (ETF) will not require a case-by-case approval.
• The SEC decision will allow for the approval process to be expedited, allowing for Solana, XRP, and Dogecoin ETFs.

A Significant Change for Crypto ETFs

The Securities and Exchange Commission (SEC)’s vote is a historic change in the regulatory framework for digital assets in the U.S. Previously, each application for a spot crypto exchange-traded fund (ETF) would undergo a lengthy, case-by-case review that could take more than 240 days. The newly adopted Crypto ETF Generic Listing Standards provide a clear, pre-established set of rules for exchanges to use for listing products that meet the requirements, and effectively create an automated approval process.

How the New Crypto ETF Generic Listing Standards Framework Functions

The adopted standards establish multiple routes to eligibility. A crypto is considered eligible if it trades on a market with appropriate surveillance sharing agreements, has a corresponding futures contract that is traded for at least six months, or has been previously tracked in an ETF with a meaningful exposure. This streamlined framework offers significant regulatory depth and clarity to the level asset managers have sought for many years, reducing the degree of uncertainty and regulatory delay.

Read also: Ondo Global Markets Launches +100 Tokenized Stocks & ETFs

Impacts and Next Steps

With this decision, the last impediment to the launch of an avalanche of new investment products tracking cryptos has been removed. Analysts expect new ETFs under this new crypto ETF generic listing standards rule, likely for Solana and XRP, to launch as early as October. The rule, promoted by SEC Chairman Paul Atkins, aims to boost innovation and maximize investor choice in America’s trusted capital markets, although certain commissioners voiced concerns relating to investor safety and market saturation.

The Floodgates Are Open

This approval is possibly the most important regulatory development for crypto since the creation of Bitcoin ETFs. It suggests that digital assets are now being recognized for their formal inclusion into traditional finance, with a process that is defined and transparent. For investors, it means easier access to a diversified portfolio of crypto assets via vehicles that are both regulated and familiar.

Final Thought: Now that there is a straightforward path open, is the battle for ETF issuers going to move from regulatory approval to arduous competition for market share?

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For more SEC-related stories, read: SEC Greenlights Liquid Staking: Why This Is a Good Decision for DeFi