Despite the Securities and Exchange Commission (SEC) rejecting and delaying applications of several promising ETF proposals, Coinbase has its eyes set on launching an exchange-traded fund (ETF). The largest crypto exchange in the US is talking to BlackRock executives to get help with the product, as reported by Business Insider. The talks follow Coinbase’s announcement in March, in which it aimed at launching an index fund of digital coins. The ETF will give a chance to retail investors to dabble into the crypto market without holding the cryptocurrencies.
BlackRock Brings Experience and Expertise
The Wall Street giant manages assets worth over $6 trillion. Its partnership with Coinbase will supply the exchange with valuable lessons in ETF creation and management. Coinbase has held several conversations with the BlackRock blockchain working group, according to some sources.
Coinbase already has a diverse business model that covers trading, custody services, brokerage services, venture capital, as well as asset management. On the other hand, BlackRock is one of the pioneers of the ETF market and has a reputed iShares division.
The partnership between the two seems a natural fit. It is unclear whether the talks between the two entities were a one-off or part of a series of ongoing conversations. Sources suggest that BlackRock didn’t give “any concrete recommendation” to Coinbase regarding the ETF.
Is Blackrock Interested in a Crypto ETF?
The blockchain working group at BlackRock began functioning in 2015 and is comprised of company employees from its numerous businesses. The working group is tasked with identifying opportunities to apply blockchain technology in financial services.
BlackRock has previously clarified that it doesn’t see an exciting opportunity in becoming a crypto fund issuer. CEO Larry Fink called Bitcoin an “index of money laundering” and suggested that the firm’s clients have “zero interest” in the digital currency market.
It means that Coinbase could be working alone on its ETF offering. It will join VanEck, Bitwise Asset Management, and Gemini, which have already jumped into the ETF bandwagon. Sources suggest that the Coinbase ETF will track a basket of cryptocurrencies, instead of just Bitcoin. The ETF will help Coinbase provide a safe offering to retail investors who are still shy of entering the crypto market.
Regulators, on the other hand, don’t appear too thrilled with the applications so far. They have rejected Gemini’s ETF proposal twice and recently did away with nine other ETF proposals, leaving only the CBOE-backed VanEck-Solidx ETF on its desk. The decision on this is pending.
Coinbase Is Considering a Cryptocurrency ETF was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.