The U.S. Securities and Exchange Commission has announced a significant policy shift, permitting in-kind creations and redemptions for crypto exchange-traded products . This update comes after the SEC had initially approved bitcoin and ether ETFs with the restriction that redemptions be made in cash. Asset managers had long advocated for this change, asserting that commodity ETFs typically allow for in-kind transactions—i.e., using the commodity itself, such as bitcoin or ether, rather than cash. This new allowance aligns crypto ETFs more closely with traditional commodity ETFs and is likely to impact the structure and efficiency of these financial products.
In a related development, JPMorgan Chase is considering lending against clients' cryptocurrency holdings, marking a significant shift in traditional banking’s adoption of digital assets. The bank is evaluating offering loans backed by crypto assets like Bitcoin and Ethereum, expanding on its earlier plans to accept cryptocurrency exchange-traded funds as collateral. This move indicates a broader acceptance of cryptocurrencies by major financial institutions, a stark contrast to JPMorgan CEO Jamie Dimon's earlier criticisms of crypto.
Meanwhile, the European Central Bank has voiced concerns over the dominance of U.S. dollar-backed stablecoins in a blog post, warning that their use in the eurozone could weaken ECB monetary control. At the same time, PayPal launched a worldwide crypto payment feature, underlining how U.S. companies are actively pushing forward in the digital asset space. The newsletter suggests that Europe is lagging significantly behind, despite the ECB promoting development of euro-based alternatives and urging global regulatory coordination.
Additionally, Ethereum is celebrating its 10th anniversary, with its ETH token experiencing a 100% gain in 90 days but still struggling below the $4,000 mark. Strong ETF inflows and options markets suggest optimism about ETH's future. However, debates over consumer financial data access intensify in the U.S., with crypto platforms opposing JPMorgan’s moves to charge fintech firms for data access.
These developments highlight the rapidly evolving landscape of cryptocurrency, with regulatory bodies, financial institutions, and digital asset platforms all playing pivotal roles in shaping the future of the industry.
