BlackRock has updated its spot Bitcoin ETF proposal, simplifying how Wall Street banks can engage by using cash to form new shares, not just crypto.
This ‘prepay’ approach lets banks like JPMorgan and Goldman Sachs become authorized participants without holding Bitcoin directly, avoiding regulatory barriers.
The proposal was detailed to the U.S. SEC by BlackRock and NASDAQ members.
The change could significantly enable banks with strict regulations to partake in Bitcoin investment without direct ownership.
In this model, authorized participants would give cash to a broker-dealer who then buys Bitcoin for the ETF, held by Coinbase Custody for BlackRock. This method also transfers risk from the participants to market makers.
BlackRock’s revised in-kind redemption model presented to the SEC on Nov. 28. Source: SEC
BlackRock has stated that its new model enhances defenses against market tampering, a key concern leading to the SEC’s repeated rejections of past Bitcoin ETF proposals.
Furthermore, BlackRock asserts that this ETF framework will bolster safeguards for investors, reduce trading expenses, and foster greater uniformity within the Bitcoin ETF sphere.