- Franklin Templeton’s launch of its Ethereum ETF, EZET, highlights increasing interest in cryptocurrency investment products.
- The ETF’s registration on the DTCC streamlines share creation and redemption, which is crucial for maintaining market price alignment.
- The SEC’s ongoing regulatory review affects the approval timeline for the ETF, with a decision deadline extended to June 11.
Franklin Templeton, a major asset management firm, has introduced its Ethereum exchange-traded fund (ETF), representing a notable advancement in cryptocurrency investment offerings. Codenamed EZET, the “Franklin Ethereum TR Ethereum ETF” has been registered on the Depository Trust and Clearing Corporation (DTCC) website, a central hub for processing securities transactions in the United States.
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The DTCC listing facilitates the creation and redemption of ETF shares, a mechanism vital for maintaining the ETF’s market price alignment with its net asset value. This capability is essential for investor confidence and ensures the fund adapts efficiently to market demand.
Regulatory Review and Market Implications
While the ETF’s listing on the DTCC is a positive development, it does not imply approval from the U.S. Securities and Exchange Commission (SEC). The SEC has yet to approve Franklin Templeton’s S-1 filing for a spot Ether ETF, submitted on February 12. If approved, the ETF will be traded on the Chicago Board Options Exchange under “Franklin Ethereum ETF.”
The regulatory review process is ongoing, with the SEC recently postponing its decision. Initially set for a ruling, the SEC has extended the review period by 45 days, with a new decision deadline set for June 11. This extension allows the SEC additional time to consider the proposed rule change necessary for listing and trading the ETF on the Cboe BZX Exchange.
The introduction of the Franklin Ethereum TR Ethereum ETF positions Franklin Templeton alongside other financial heavyweights like BlackRock and Grayscale, which have also ventured into Ethereum-based funds.
This move by Franklin Templeton underscores the growing interest in cryptocurrency investments and the evolving regulatory framework governing these assets. Investors and market watchers are keenly observing the SEC’s actions, as its decisions will likely influence the trajectory of cryptocurrency ETFs in the U.S. market.
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