Franklin Templeton Joins Spot Bitcoin ETF Race Amidst Regulatory Uncertainty

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Franklin Templeton, a global investment firm, has entered the competitive ring for a spot Bitcoin exchange-traded fund (ETF). In a recent submission to the US Securities and Exchange Commission (SEC), the company has detailed its plan for a Bitcoin ETF, where Coinbase will serve as the custodian. The ETF will be traded on the Cboe BZX Exchange. Pricing will rely on the CME's CF Bitcoin Reference Rate–New York Variant.

This development comes after the SEC's postponement of decisions on spot ETF applications from several other prominent firms, including WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise, and Invesco. Additionally, an important court ruling on August 29 mandated that the SEC consider Grayscale's request to transform its Bitcoin (BTC) futures ETF into a spot ETF.

Franklin Templeton's Bitcoin ETF application acknowledges the regulatory uncertainties surrounding digital assets in the US. It points out that adverse legislative or regulatory changes could significantly impact the value of Bitcoin and related products. Such developments could include measures such as banning or restricting Bitcoins, mining activities, digital wallets, and services related to Bitcoin trading and custody. 

The company has also shown increasing interest in digital assets, exploring funds blending blockchain technologies with tokenised treasury bonds. With approximately $1.5 trillion in assets under its management, Franklin Templeton's entry into the crypto market adds to the growing institutional interest in digital assets. 

However, other financial heavyweights, including BlackRock, WisdomTree, and Fidelity, have already advanced in the regulatory process with their ETF proposals. The SEC is scheduled to review these applications in mid-October. However, historical delays in the regulatory process suggest a final decision may come around March 2024.

Franklin Templeton's entry into the Bitcoin ETF race adds to the growing momentum toward greater crypto adoption in traditional finance. The potential approval of a Bitcoin ETF in the US remains desirable, with investors eagerly awaiting regulatory decisions in the coming months.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash