On June 26, according to The Block, Ms. Hester Peirce - a Commissioner of the US Securities and Exchange Commission (SEC) - said that the "physical redemption" mechanism for cryptocurrency Exchange Traded Funds could be implemented soon.
Speaking at a seminar organized by the Bitcoin Policy Institute, Ms. Peirce - a Republican member - was asked about the possibility of SEC approving a registration and redemption mechanism for cryptocurrency ETFs in a physical form, instead of the current cash-based regulation. Responding to whether this could happen in the near future, she said: "The proposed forms are under review. So, I think this will happen at some point. I cannot predict the outcome, but we note that many people are interested in this issue."
In recent months, large financial institutions - including BlackRock - have continuously called on the SEC to approve a Bitcoin ETF registration and redemption mechanism in physical form (in-kind), instead of being limited to cash transactions. This method allows investors to directly exchange the underlying assets (such as Bitcoin) for ETF shares and vice versa, helping to minimize risks and costs compared to the cash mechanism.
In January this year, Nasdaq filed a 19b-4 form on behalf of BlackRock with the SEC to propose changing this mechanism. Since then, many other organizations have submitted similar forms to promote approval from the regulatory body.
