In a surprising development, the SEC is set to introduce generic listing standards for cryptocurrency ETFs. This move would enable ETF listings without requiring individual approvals on a case-by-case basis.
The language within the filing emphasizes that cryptoassets are categorized as commodities rather than securities. As a result, the Commission is reclassifying numerous assets, potentially paving the way for an XRP ETF along with various other new offerings.
Significance of Generic Listing Standards
The SEC has been implicitly endorsing new crypto ETFs such as those based on XRP and DOGE; however, there has yet to be an unequivocal indication of broader acceptance. Numerous altcoin ETF applications continue to flood into the Commission without any corresponding boost in confidence.
That changed today when the SEC took decisive action by approving generic listing standards for cryptocurrency ETFs:
“[Several leading exchanges] submitted proposed rule changes to adopt generic listing standards for Commodity-Based Trust Shares. Each of these proposed rule changes… underwent notice and comment procedures. This order approves these proposals on an expedited basis,” stated the SEC’s filing.
The proposals originated from Nasdaq, CBOE, and NYSE Arca—platforms that ETF issuers have utilized to submit their applications. In essence, this ruling regarding generic listing standards could significantly alter how crypto ETFs receive approval.
A New Chapter for Crypto ETFs
These updated standards will empower issuers to create customized compliant proposals for crypto ETFs. If these submissions satisfy all criteria set forth by the Commission, underlying ETFs could begin trading in markets without needing direct approval from the SEC. This change would alleviate a major bottleneck in establishing sought-after ETFs.
“By endorsing these generic listing standards, we are affirming our commitment to keeping our capital markets at the forefront of innovation in digital assets globally. This approval enhances investor choices and promotes innovation by simplifying the listing process,” asserted SEC Chair Paul Atkins in a press release.
The SEC has already been working towards streamlining its approval process for cryptocurrency ETFs; however, implementing these generic listing standards could achieve that goal more effectively. The success of this rule change hinges on treating tokens as commodities instead of securities—a shift federal regulators have begun with assets like XRP.
If implemented successfully as intended, we may soon see ETFs based on XRP, Solana, and many other cryptocurrencies entering the market rapidly following this understated announcement with significant ramifications ahead.
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