$BTC SEC approves exchange of physical items for cryptocurrency exchange-traded products

The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that "authorized participants" (AP) for cryptocurrency exchange-traded products (ETPs) can now conduct physical transactions, similar to all other commodity-based ETPs.

APs are financial institutions that create and redeem ETP shares based on market demand. The creation and redemption processes are most efficient and cost-effective when APs like Goldman Sachs, UBS, Citi, and Citadel can exchange the underlying cryptocurrency assets directly for ETP shares from issuers like Blackrock or Grayscale, without having to liquidate those assets into cash first.

"This is a new day at the SEC, and a key goal of my chairmanship is to develop a suitable regulatory framework for the cryptocurrency asset market," SEC Chairman Paul Atkins said. "I am pleased that the Commission has approved these orders allowing for the creation and redemption of physical form for a range of cryptocurrency asset ETPs. Investors will benefit from these approvals, as they will make these products cheaper and more efficient."