The U.S. Securities and Exchange Commission has voted to greenlight in-kind redemptions for Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs).
This means that it will now be possible to create and redeem shares of spot-based cryptocurrency ETFs with the help of actual underlying assets instead of cash. Prior to this, crypto ETFs were only able to handle cash-based transactions.
The crypto industry has been actively advocating for enabling in-kind redemptions since they will increase efficiency and lower costs.
Building a “rational” regulatory framework
SEC Chair Paul Atkins claims that the approvals “continue to build a rational regulatory framework for crypto, leading to a deeper and more dynamic market.” This will benefit all American investors, Atkins adds.
“I welcome in-kind creations and redemptions for crypto-asset ETPs, a feature that ETP sponsors and investors have wanted since the initial approvals of crypto-asset ETPs,” Commissioner Hester Peirce, a longtime cryptocurrency advocate, has commented on her social media profile.