Stock exchanges propose new standards to unlock crypto ETFs

Cboe and NYSE Arca, two major U.S. stock exchanges, have proposed to the SEC the creation of new standards to expedite the approval of crypto ETFs.

The United States is at a pivotal moment for the future of cryptocurrencies and digital asset exchange-traded funds (ETFs). With the goal of modernizing access to innovative cryptocurrency-based financial products, the country's major exchanges have submitted ambitious regulatory proposals to the Securities and Exchange Commission (SEC), while the White House, through its dedicated digital asset working group, is pushing for the creation of a clearer and more competitive federal framework for the market. 

Nate Geraci, president of Nova Dius Wealth, reported that Cboe, along with other securities exchanges, requested the SEC a rule change that would allow cryptocurrency ETFs to be listed and traded under a common standard frameworkThus, rather than requiring issuers to seek specific approval for each cryptocurrency ETF they want to list, these products can be approved more efficiently as long as they meet certain criteria.

Experts point out that this joint effort among key players in the financial ecosystem seeks to transform the operations of new ETFs and strengthen the United States' position as a leader in the digital markets revolution. Furthermore, the presentation of this proposal is aligned with recent recommendations made by the Presidential Digital Assets Task Force, which in its first report advocated for a clearer and more efficient federal regulatory framework for the cryptoasset market.

Accelerate the approval of crypto ETFs to boost financial innovation

Currently, individual SEC approval of a spot cryptocurrency ETF can take up to 240 days, a period that limits the entry of new financial products into the market. To streamline this process, Cboe and NYSE Arca have proposed a regulatory change that seeks to reduce the approval period to approximately 21 days. 

Cboe has filed Form 19b-4 requesting a regulatory amendment to allow cryptocurrency ETFs to list and trade under a standardized framework, which would facilitate faster and more efficient authorization, such as explained Geraci.

For its part, NYSE Arca has proposed establishing specific generic rules for the listing and trading of Commodity-Based Trust Shares. These rules would allow for more efficient listing of these products by reducing the current costs and timescales of the trading process, fostering more open competition among issuers, and benefiting the investing public.

According to experts, these regulatory changes, if approved, would have a positive impact on competition among fund issuers, as well as reduce the costs and time required to introduce new ETFs. Furthermore, they would foster broader investor access to digital assets and establish clear rules regarding custody, trading, transparency, and protection, aligning with the specificities of the crypto market for more appropriate and efficient oversight.

In short, these proposals seek to transform the approval process for cryptocurrency ETFs, making the offering of exchange-traded funds more dynamic and accessible, fostering financial innovation, and facilitating faster and more secure access to digital products for investors.

The US seeks to modernize the legal framework for digital assets.

In parallel, the White House Presidential Task Force on Digital Assets, created by order of President Donald Trump, he presented Its first market report, with proposals for a federal regulatory framework that addresses the unique characteristics of digital assets, calls for strengthening federal oversight, coordinating key regulators like the SEC and CFTC, and facilitating the formalization of clear rules for the registration, custody, and trading of cryptocurrencies.

Among the recommendations, the need to break down the regulatory barriers that have hindered the progress of financial technologies so far stands out. This emphasizes the need for a coherent regulatory environment that provides legal certainty to investors and operators and facilitates the development of innovative financial technologies.