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BlackRock, the world's leading provider of Exchange Traded Funds (ETFs), is investigating the disruptive implications of blockchain and cryptocurrency since July, when they set up a working group to evaluate technology, eliciting rumors that they were creating a bitcoin ETF.
Although this was dismissed by CEO Larry Fink, who claimed that his customers had "zero interest" in cryptocurrency trading, this new contact with Coinbase – the main US cryptocurrency trade – suggests that such a development could still to be taken into consideration
A new generation of ETFs?
The Securities and Exchange Commission recently rejected a series of proposals from the ETF, including a fund proposed by the Winklevoss twins and the bitcoin fund of VanEck and Solid X. This request by the two companies was denied two times, but a third inning is scheduled with the financial regulator on 30 September.
In their rejections the regulators quote c oncerns of potential manipulation of the market, lack of traditional means for detecting and deterring frauds and inadequate sharing sharing arrangements [19659002] Without further information, it is not possible to determine what would distinguish the potential offer of Coinbase from those that precede it but many of the problems mentioned by the SEC concern the market in general, rather than the details of a particular proposal.
Even the prestige lent by BlackRock would not be enough on its own to protect markets from manipulation, or discourage fraud. But Coinbase could have another trick up its sleeve: a source said Business Insider that Coinbase's ETF would have tracked more cryptocurrencies, not just bitcoins. This would probably develop the company's cryptocurrency index which includes bitcoin, ether, litecoin, ethereum classic and bitcoin money.
An image problem of the ETF?
Despite the manipulation and fraud concerns mentioned by the SEC, some have suggested that the real reason for ETF layoffs is very different. Bill Barhydt, managing director of the bitcoin payment start-up Abra, claims that so far the candidates simply did not comply with the standards of the SEC:
"I think the problem with the SEC, frankly , whether people who are doing the applications is not the mold of those used to approve the SEC, "said Barhydt CNBC " I worked for Goldman Sachs, but if you look like I dress you probably would not know Probably, unfortunately, I could not go as if I were here at an SEC meeting to say I'm requesting the possibility of issuing an ETF. "
Barhydt is not the only one to consider justification for dismissal weak, and SEC Commissioner Hester Peirce published a detailed dissent explaining why his fellow commissioners were wrong to reject the proposals, claiming the existence of a Catch-22 situation, so " Greater institutional participation would improve many of the Commission's concerns about the bitcoin market at the base of its disapproval order. "
The Road to Approval
Although Hester's support puts her in the minority of the SEC commissioners, it is unlikely to stay there long, and the recent appointment of Elad Roisman to the SEC has prompted the hope that the agency will soon make the leap forward. A well-known cryptocurrency supporter, Elad Roisman outlined the need for fair regulation in a speech to the hearing of the Senate Banking Committee in July: [19659002] "It is essential that the SEC addresses these new challenges in a fair and transparent manner, provides clarity and certainty to markets and investors and applies the laws and regulations that market participants (19659006) have said.
In the SEC, its role will focus on renewing the SEC's vision regarding cryptocurrencies and the possibility of approving cryptocurrency ETFs. His appointment will bring a total of five pro-crypto members to the commission, tilting the balance in favor of approval.
As for Coinbase, the company continues to develop – the company has doubled the number of employees this year and the CEO remains as optimistic as ever, saying [19659007] TechCrunch that "the total number of people in the cryptosystem can reach one billion within the next five years, compared to about 40 million today."
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