Cboe Urges SEC To Support Bitcoin ETFs

  • Chris Concannon from Cboe Global Markets sent a letter the SEC explaining that bitcoin ETFs do not involve significant risk and their approval should not be hindered
  • The letter was in response to a letter from the SEC to Cboe in January which stated the SECs concerns that a BTC ETF would not provide sufficient investor protection

The exchange operator of Cboe Global Markets has said that the U.S. securities regulators should not hinder the development of a bitcoin ETF (exchange-traded-fund) as they are similar to any other commodity-based ETFs.

In January the U.S. SEC said that before a bitcoin ETF could be approved “significant investor protection issues” must be addressed. Other questions about the pricing, storing and settlement of the instrument were raised.

On March 23rd, Cboe President Chris Concannon wrote a letter to Dalia Blass, a Director at the SEC stating Cboe’s belief that existing ETF frameworks can relatively easily be applied to crypto-assets. The letter read:

“Cboe would like to take this opportunity to address certain of these concerns in an effort to further the discussion with a particular focus on exchange-listed Cryptocurrency Funds (“Cryptocurrency ETPs”

Cboe - Chris Concannon

The letter started with a brief ‘History of Cryptocurrency’ where Cboe explained the origins of bitcoin and the growth of crypto-assets. Following this the letter discussed certain questions the SEC may have over crypto-assets and their suitability for ETFs.

“While Cboe shares many of the concerns raised in the Staff Letter, we believe that the vast majority of these concerns can be addressed within the existing framework for commodity-related funds related to valuation, liquidity, custody, arbitrage, and manipulation”

Cboe - Chris Concannon

These question areas were broken down to the following issues:

  • Valuation
  • Liquidity
  • Custody
  • Arbitrage
  • Manipulation and Other Risks

An often-cited concern is that crypto-asset markets are not liquid enough to support financial products such as ETFs safely, however, Chris Concannon stated:

“As the volumes continue to grow, especially on regulated U.S. markets, the overall spot bitcoin market looks more and more like a traditional commodity market and Cboe continues to believe that the spot market is sufficiently liquid to support a bitcoin ETP”

Cboe - Chris Concannon

After detailing responses to the above concerns, Cboe believes that ETFs would provide a safer access to cryptocurrency exposure than traders investing in the underlying asset.

The letter from Cboe was in response to the SECs letter released in January that outlined their concerns over approving an ETF as it could cause market fragmentation and that investors would not be sufficiently protected.

Venezuela: 49 Retail Stores Start Accepting Crypto Payments Using Pundix’s PoS Devices

One of the largest chains of department stores in Venezuela, Traki, is set to start accepting cryptocurrency payments at its 49 retail stores thanks to PundiX’s point-of-sale (PoS) device XPOS.

According to a press release, the Singapore-based blockchain firm’s devices are helping Traki’s 49 stores accept ten cryptocurrencies, including BTC, ETH, BNB, DAI, and NEM. The stores will also accept lesser known cryptocurrencies like KuCoin Shares (KCS), Kyber Network (KNC), and Digix Gold Token (DGX), as well as PundiX’s own NPXS and NPXSXEM tokens.

Zac Cheah, co-founder and CEO of the Singapore-based startup, was quoted as saying:

Traki has been one of the early adopters of cryptocurrencies in Venezuela, which highlights its commitment to improve the traditional financial system. We hope the XPOS further expands the crypto use cases that customers have come to expect from Traki.

Michael Gomez, Traki’s chief of cryptoasset, noted the company is always looking to offer its customers the “most convenient options,” and added cryptocurrencies have proven to be an effective payment solution.

Venezuela’s economy has been suffering from hyperinflation in the last few years, which has been seeing the country’s situation worsen as time goes by. Per Bloomberg’s Café Con Leche Index, Venezuela’s annual inflation ration over the past 12 months was of 35,900%. PundiX notes the situation makes cryptos “a necessary form of commercial trade.”

Bitcoin trading volumes on the peer-to-peer crypto exchange LocalBitcoins have hit an all-time high earlier this year in Venezuela, seemingly as a result of the country’s situation. While some tout Dash is the most widely-used crypto in the country, the assertion has been questioned.

PundiX’s XPOS device is being used in over 30 countries, the press release adds, and the company is said to be planning to roll out an addition 100,000 to the market by 2021.