How, When and Where Will Regulators Accept Bitcoin ETFs?

Will bitcoin exchange-traded funds (ETFs) ever be accepted by regulators in the US or abroad? That’s a question that’s even more complex than would initially appear, say industry participants.

A better question might be: is it regulators, specifically, that need convincing? After all, the agencies tasked with enforcing existing laws heavily consider input from multiple parties, including banks, many of whom have yet to embrace the still-nascent digital currency.

That was the viewpoint put forward by Ryan Radloff, head of investor relations at XBT Provider, a Sweden-based issuer that’s already succeeded in listing bitcoin exchange-traded notes on a public exchange.

“It’s a bit of a chicken-and-egg problem between the banks and the regulators,” Radloff said.

“You’re not going to see many big banks jumping in until the regulators are comfortable.”

Different approaches

On that point, even within the US, different regulators approach cryptocurrencies like bitcoin very differently. Bitcoin is a form of property to the IRS, a virtual currency to FinCEN and a vehicle for ‘money transmission’ in the eyes of various state regulators.

The SEC has not yet taken an official stance on bitcoin’s classification, but in the meantime, it has rejected two applications for bitcoin-backed exchange-traded funds thus far (the Winklevoss Bitcoin ETF and the SolidX Bitcoin

Read more ... source: CoinDesk

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