Thomas Daniels
Franklin Templeton, a prominent asset management firm, has introduced its Ethereum exchange-traded fund (ETF) called the “Franklin Ethereum TR Ethereum ETF,” bearing the ticker code EZET. This significant move involves the ETF’s listing on the website of the Depository Trust and Clearing Corporation (DTCC), a pivotal entity for securities transactions in the United States.
The appearance of the ETF under the DTCC’s “Create/Redeem” section is a crucial step in its operational deployment, indicating that it is now set up for creation and redemption. It is important to note that this listing does not equate to an endorsement from the U.S. Securities and Exchange Commission (SEC), as approval from the agency is still pending.
The presence on the DTCC platform implies that the ETF has met certain registration and compliance prerequisites, thus qualifying it for trading and settlement within the DTCC’s frameworks. Yet, the ultimate green light depends on the SEC’s evaluation based on comprehensive regulatory criteria.
Franklin Templeton submitted a Form S-1 to the SEC in February, aiming to launch a spot Ether (ETH) ETF. If sanctioned, the ETF would trade under the name “Franklin Ethereum ETF” on the Chicago Board Options Exchange.
In a recent update this April, however, the SEC disclosed a postponement in its decision regarding the application, extending the review period by an additional 45 days to June 11.
Several other major financial institutions, including BlackRock, Grayscale, VanEck, and ARK Invest, are also in the pursuit to secure approval for their respective spot Ether ETFs.
Nonetheless, the pathway to approval for these Ethereum-based ETFs seems more complex compared to the earlier sanctioned spot Bitcoin ETFs, which received approval in January.
Eric Balchunas, a Bloomberg ETF analyst, estimated in March that the likelihood of a spot Ether ETF receiving approval in May stood at approximately 35%. He highlighted the SEC’s comparatively tentative approach toward Ethereum versus the Bitcoin ETF applications.
Balchunas further mentioned that the perspectives of SEC Chair Gary Gensler on Ether, particularly his hesitance to categorically classify it as a security, could potentially impact the decision-making process.
