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U.S. Seeks Bitcoin ETP Approval by SEC

Regulation

President of the Chicago Board Options Exchange (Cboe) urged the SEC to assess the market potential of Bitcoin and other cryptocurrencies as an ETP, in a letter detailing their history, present status and applicability to the U.S. financial investment sector.

Crypto Persuasion

The president of Cboe, Dalia Blass, covers all the bases in an eight page letter to the SEC (U.S. Securities and Exchange Commission) in hopes of legitimizing their introduction of cryptocurrencies as an ETP for futures trading.

The commission has only just begun their work to outline regulations for cryptocurrencies, but has moved forward with crackdowns as well. The letter responds every hesitation, concern and identified risk of adopting cryptocurrencies that the SEC has come up with in clear cut sections of the:

  • History
  • Valuation
  • Liquidity
  • Custody
  • Arbitrage
  • Manipulation and Other Risks
The Big Picture

A poetic conclusion to the otherwise research based letter captures the essence of their goal with accommodating the future of digital assets, “to ensure that American capital markets remain fertile ground for capital formation and financial innovation.”

ETP?

Exchange Traded Products are a type of security traded on the national securities exchange. Investment Funds or Mutual Funds are a part of this category differing in how they are sourced, and when they can be traded.

Cboe currently accounts for “23.81% of the daily trading volume in ETPs.” They were the first derivatives exchange to launch Futures Trading.

Trading securities like ETPs requires a brokerage account. Growing accepting of cryptocurrencies in this space will likely lead to much higher volumes and overall value to the space.

Asset or Currency

Bitcoin is often assimilated to digital gold, an asset. Yet, it functions as currency and growth of the Lightning Network could bring Bitcoin to an everyday use case.

Japan, Canada, Germany, Holland and recently, Russia consider Bitcoin a currency.

As the technology grows along with regulation, the role of Bitcoin and cryptocurrencies will evolve. Certainly an increased in major financial brokerage trading Bitcoin will play a factor in this equation toward wide-spread adoption.

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