Dogecoin and XRP ETFs? SEC Considers Grayscales Latest Proposals

The SEC has acknowledged Grayscale's proposals for Dogecoin and XRP spot ETFs and is seeking public input before making a decision on their approval.

SEC Calls for Public Input

The U.S. Securities and Exchange Commission has officially acknowledged Grayscale's proposals to convert its Dogecoin and XRP trusts into exchange-traded funds (ETFs) and is now seeking public comments on the potential approval of these spot ETFs. Interested parties are invited to submit their feedback within 21 days following the publication of the notice in the Federal Register. Post this period, the SEC will evaluate the proposals and may choose to approve, disapprove, or initiate further proceedings.

Grayscales strategic move to convert its trusts into ETFs underscores its commitment to broadening its cryptocurrency offerings and providing investors with regulated avenues to access these digital assets.

Understanding the 19b-4 Filing Process

The submission of a 19b-4 form is a critical component in the process of proposing a spot cryptocurrency ETF. Upon the SEC's acknowledgment, the proposal is published in the Federal Register, triggering the agency's formal review process. The SEC is allotted a 240-day window to make a decision, commencing with an initial 45-day period.

Proposed Structure of the Dogecoin ETF

Grayscale's filing outlines a structure where authorized participants would handle cash transactions instead of directly dealing with Dogecoin (DOGE). This design aims to address regulatory concerns by minimizing direct exposure to the cryptocurrency. Coinbase Custody is designated to manage the custody of DOGE, while BNY Mellon is set to undertake administrative responsibilities. Pricing data for the trust would be sourced from regulated U.S. trading platforms, including Coinbase, Kraken, and Crypto.com, which collectively facilitate a significant portion of DOGE-USD trades.

Dogecoin's Evolution and Market Adoption

Originating as a meme cryptocurrency in 2013, Dogecoin has evolved into a widely recognized digital asset. Grayscale emphasizes that DOGE has "transitioned from a memecoin of a Shiba Inu to a tool for global financial inclusion, grassroots activism, and a viable means of payment." The firm highlights that over 2,500 merchants and retailers, such as the Dallas Mavericks and AMC Theatres, accept DOGE for goods and services. Additionally, DOGE has been utilized for various charitable initiatives, including funding the construction of a well in Kenya.

Broader Context of Crypto ETF Proposals

In recent weeks, multiple firms have submitted proposals for cryptocurrency ETFs, based on assets like Solana and Dogecoin. This surge in applications coincides with a shift in the SEC's regulatory approach following the departure of former SEC Chair Gary Gensler, who was known for his skepticism toward cryptocurrencies. The current regulatory environment appears more receptive, prompting firms like Grayscale to advance their ETF initiatives.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Text source: Crypto Daily™

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