Written by Dong Jing, Wall Street Journal
The regulation of digital assets in the United States has reached another important moment. The SEC has greatly simplified the approval process for digital currency ETFs, which will pave the way for spot cryptocurrency ETFs such as Solana and XRP.
On September 17th, local time, the SEC voted to approve rule changes proposed by three major national securities exchanges, clearing the way for the full opening of the digital asset ETF market. This decision marks a significant shift in US digital asset regulatory policy and will pave the way for various cryptocurrency spot ETFs, from Solana to Dogecoin.
The new rules establish common listing standards, significantly streamlining the approval process for cryptocurrency ETFs. Asset management firms and exchanges can now apply for new cryptocurrency spot ETFs based on unified criteria, eliminating the need for lengthy, customized regulatory reviews. Approval times are now reduced from 240 days or more to a maximum of 75 days.
The market expects that the first products to benefit will be ETFs tracking Solana and XRP. Asset managers began submitting applications for these products to the SEC more than a year ago, but the regulator has only approved spot ETFs for Bitcoin and Ethereum.
This is the latest move by the Trump administration to promote the mainstreaming of digital assets, in stark contrast to the cautious approach of the previous Biden administration. Industry insiders said that although the regulatory floodgates have been opened, the final launch of the product still requires the completion of a number of follow-up tasks, such as marketing plans, legal documents, and service providers.
General listing standards officially take effect
The rule changes voted by the SEC involve the three major exchanges: the New York Stock Exchange (NYSE), Nasdaq, and Cboe Global Markets.
The new rules establish common listing standards for digital asset and other spot commodity ETFs, which asset managers and exchanges must meet to obtain approval for new spot crypto ETFs.
The SEC issued an order in July detailing the specifics of these listing standards. Prior to that order, the SEC reviewed each spot crypto ETF application on a case-by-case basis, requiring exchanges and asset managers to submit two separate applications to different departments.
Teddy Fusaro, President of Bitwise Asset Management, said:
“This is a watershed moment for the U.S. regulatory approach to digital assets, overturning more than a decade of precedent dating back to the first Bitcoin ETF application in 2013.”
Approval efficiency has been greatly improved
The new process will significantly speed up the listing of cryptocurrency ETFs. Reportedly, the maximum time from application to listing will be reduced from 240 days or even longer to 75 days, providing greater certainty for asset managers eager to enter the digital asset market.
In a press release, SEC Chairman Paul Atkins described the committee members’ approval as a move to promote innovation and reduce barriers to entry for digital asset products. This statement reflects the Trump administration’s more friendly regulatory stance toward digital assets.
Steve Feinour, a partner at the law firm Stradley Ronon, expects most applicants to opt for a provision that allows for fast-track approval of crypto ETFs that have existing Commodity Futures Trading Commission (CFTC)-regulated futures contracts in existence for at least six months.
He expects the first products to be available as early as October.
The first batch of products is about to be released
ETFs tracking Solana and XRP are widely expected to be the first products approved under the new rules. Asset managers began submitting these applications to the SEC more than a year ago, but the regulator has only approved spot ETFs for Bitcoin and Ethereum to date.
Even the Bitcoin ETF, whose January 2024 debut came only after years of struggle and legal wrangling, has been slow to consider spot crypto ETFs under the Biden administration, while the Trump administration has clearly aligned itself with the crypto community, promising a more favorable stance toward digital assets.
“The door is open, but there’s still a lot of work to do,” said Steve McClurg, CEO of Canary Capital, which has several products in its pipeline.
Even after the commission's vote, "marketing plans, legal applications, collaborations with service providers will all have to be worked out according to the new roadmap," he said before the SEC ruling.
“Not every token currently qualifies, but SEC approval will open the floodgates,” Feinour noted, suggesting that while the regulatory bar has been lowered, digital assets still need to meet specific criteria to receive approval for ETF products.
