Coinbase has thrown its hat in the ring to launch a cryptocurrency exchange-traded fund (ETF) and has approached BlackRock for help, according to unnamed sources interviewed by Business Insider. BlackRock, which manages $6 trillion in assets, has pioneered ETFs and has a blockchain working group.
Coinbase, which announced a cryptocurrency index fund for accredited investors in March, joins VanEck, Bitwise Asset Management and Gemini in bidding to introduce the first crypto ETF. The Securities and Exchange Commission recently rejected nine bitcoin ETF proposals.
A Coinbase ETF would monitor different cryptocurrencies, according to one source who claimed to be familiar with the matter.
BlackRock, which launched its blockchain working group in 2015, has claimed it has no interest in issuing crypto funds. Larry Fink, BlackRock CEO, said the company’s clients have shown no interest in digital currencies and have referred to bitcoin as a money laundering index.
BlackRock created its blockchain working group with the goal of determining blockchain applications in financial services, according to an unnamed source. The working group has employees involved in the company’s multiple businesses.
BlackRock’s blockchain representatives offered no recommendations to Coinbase, the source said, and it was uncertain how extensive the conversations have been.
A host of banks, meanwhile, are developing custody products for cryptocurrencies.
Goldman Sachs has been working on a product that would allow banks to hold crypto assets and would monitor price changes for its clients. JPMorgan and Fidelity are also reportedly exploring similar products.
ICE, meanwhile, which operates the New York Stock Exchange, announced a cryptocurrency trading platform called Bakkt in August.
The outlook for a bitcoin ETF remains uncertain.
The appointment of Elad Roisman to the SEC has given some people hope that the SEC will be more likely to approve a bitcoin ETF since Roisman is known for having a strong position on regulating cryptocurrencies.
Bill Barhydt, the founder of Abra, a bitcoin payment startup, said he believes a bitcoin ETF will be approved with a year providing the SEC is confident in the applicant’s caliber.
Featured image from Coinbase.