BlackRock, crypto task force discuss ETP staking, tokenization
Wall Street giant BlackRock met with the Securities and Exchange Commission (SEC) Crypto Task Force to discuss staking within crypto exchange-traded products (ETPs) and tokenization of securities. The discussion could advance institutional interest in the crypto industry.
According to a May 9 memo published by the task force, BlackRock sought to “[d]iscuss perspectives on treatment of staking, including considerations for facilitating ETPs with staking capabilities.” The company has previously said that Ether (ETH) exchange-traded funds, while successful, are less perfect without staking.
Other crypto ETF issuers share that view. On Feb. 15, the New York Stock Exchange proposed a rule change to introduce staking services for Grayscale’s spot Ether ETFs. In April, the SEC delayed a decision on whether to approve or disapprove the rule change. BlackRock and Grayscale are behind the largest Ether ETFs by market capitalization, according to Sosovalue.
Many blockchains rely on proof-of-stake consensus mechanisms that allow users to lock their native coins for yield. A potential SEC approval of staking for Ether ETFs could lead to future requests among altcoins, including Solana (SOL) ETFs.
Tokenization on the agenda
BlackRock also discussed “tokenization of securities under federal securities regulatory framework.” Securities are traditional financial instruments where the investor expects monetary gain, such as bonds and stocks. Tokenizing securities has many benefits, including faster settlement times, lower costs than with traditional finance infrastructure, and 24-hour markets.
BlackRock already offers a US federal debt tokenized fund called BUIDL, the largest fund with a $2.9 billion market cap. Competing products include Franklin Templeton's BENJI fund.
Brokerage firm Robinhood is also exploring securities tokenization. The company is reportedly working on a blockchain that would allow retail investors in Europe to trade US securities like stocks.
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