The U.S. Securities and Exchange Commission (SEC) is known for its long and complicated process of approving Bitcoin-based ETFs. For Ethereum, the world’s second most significant cryptocurrency, regulators have decided to take a different route.
Ethereum, often seen as Bitcoin’s younger sibling, is entering new regulatory territory. Hester Peirce, an SEC commissioner, has indicated that the process of approving Ethereum-based exchange-traded funds (ETFs) will differ from the procedure used for Bitcoin.
This bold move aims to avoid repeating past mistakes. Notably, this includes the famous incident involving a breach of account X, which cast a shadow on the SEC’s reputation. Learning from its mistakes, the Commission now intends to focus on a more balanced and stable strategy.
Unlike previous delays in approving Bitcoin ETFs, the SEC plans to consider standard market and consumer factors when evaluating Ethereum-based applications. Peirce emphasized that “we shouldn’t need a court to tell us our approach is arbitrary and capricious for us to do the right thing.”
A key element of the new process will be managing expectations. Peirce noted that creating unnecessary hype around regulatory decisions is not in the SEC’s interest. The goal is to ensure a stable market environment during the decision-making period for approval.
It’s also worth noting that while the approval of Bitcoin ETFs does not signify a change in the SEC’s approach to cryptocurrency regulation, Commissioner Peirce highlighted the agency’s commitment to regulating crypto-based products currently traded on securities exchanges. Thus, the SEC’s approach to cryptocurrencies is moving closer to how markets like gold are regulated.
Such changes in the regulator’s approach could have far-reaching consequences for the cryptocurrency market. This opens the door for broader acceptance and integration of Ethereum into the mainstream financial stream, which in turn can attract new investors and enhance the sector’s credibility.
In light of these changes, an Ethereum ETF could become a milestone in the history of cryptocurrencies, symbolizing the growing understanding and acceptance of these modern financial instruments by traditional institutions. It’s a step forward not just for Ethereum, but for the entire world of cryptocurrencies, paving the way for a future where digital and traditional finances merge into a harmonious whole.
Photo by Pierre Borthiry – Peiobty on Unsplash
