Franklin Templeton Enters the Race for Spot Bitcoin ETFs 

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key takeaways:

  • Franklin Templeton, Managing $1.4 Trillion, Seeks Approval for Spot Bitcoin ETF
  • Coinbase is suggested as the cryptocurrency custodian, while Bank of New York Mellon is slated to safeguard the cash reserves for the trust. 

Franklin Templeton, a global asset management giant overseeing approximately $1.4 trillion in assets, has submitted an application to the U.S. Securities and Exchange Commission (SEC) to launch a spot Bitcoin ETF

This ETF, known as the Franklin Bitcoin ETF, would be a part of the Franklin Templeton Digital Holdings Trust and aims to mirror the performance of Bitcoin’s price, net of fund expenses.

The ETF’s shares would be secured by Bitcoin held by Coinbase Custody Trust Company, serving as the fund’s custodian. While a Franklin Templeton spokesperson refrained from providing additional comments, Coinbase has been proposed as the crypto custodian, with the Bank of New York Mellon set to custody the trust’s cash.

Despite a growing list of applicants, the SEC has yet to approve  any spot Bitcoin ETFs. The industry awaits the SEC’s decision, with uncertainty surrounding whether Gary Gensler and the SEC will change their approach to the cryptocurrency sector.

The submission of the S-1 registration statement follows a series of events in the cryptocurrency ETF landscape. The SEC had recently postponed its decisions on spot ETF applications from several firms, including WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise, and Invesco, on August 31st.

 Additionally, on August 29th, a court ruling mandated that the SEC must review Grayscale’s request to transform its Bitcoin (BTC) futures ETF into a spot ETF.

As per the application, the fund’s structure would take the form of a trust, with Coinbase responsible for safeguarding the BTC assets. Meanwhile, Bank of New York Mellon would serve as the custodian for cash and also take on administrative duties. The trading of fund shares is planned to occur on the Cboe BZX Exchange. The SEC’s forthcoming decision deadline for this application is set for October 16th.

In this context, Coinbase would be responsible for sharing data related to trading, clearing activities, and customer identification. This sharing of information aims to mitigate the potential risks associated with market manipulation. Additionally, Coinbase would also handle the secure storage of the Bitcoin reserves that underpin the fund’s shares.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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