BlackRock Brazil Introduces Depositary Receipts Fund Mirroring US Bitcoin ETF

Here are some of the major developments in the world of crypto over the past few days.
some of the major developments in the world of crypto
some of the major developments in the world of crypto

BlackRock Brazil is set to launch a new Bitcoin BDR (Brazilian Depositary Receipts) ETF on March 1st, mirroring its US Bitcoin ETF.

This ETF, named IBIT39, will be available on the B3 platform and will allow Brazilian investors to access Bitcoin through a security that can be incorporated into their portfolios.

The fund will carry an administrative fee of 0.25% and is expected to attract investors interested in crypto exposure.

The launch of the iShares Bitcoin Trust ETF BDR marks an advancement in ETF innovation, providing investors with an avenue to invest in Bitcoin through a regulated and accessible instrument.

This move by BlackRock Brazil comes after the success of its US Bitcoin ETF, which reached $2 billion in assets under management (AUM) in just two weeks.

The Brazilian ETF market already has 13 funds with crypto exposure, reflecting a growing interest in digital assets among investors.

BlackRock Brazil's president, Karina Saade, highlighted the significance of this launch, emphasizing the importance of making Bitcoin accessible to investors through regulated channels.

If the launch of the Bitcoin BDR ETF is successful, BlackRock may consider launching a similar product for Ethereum, pending approval from the US Securities and Exchange Commission (SEC).

US Lawmakers Progress Resolution to Enable Banks in Crypto Custody

The House Financial Services Committee has taken a significant step toward enabling banks to offer cryptocurrency custody services by advancing a resolution aimed at overturning the SEC's Staff Accounting Bulletin No. 121.

This guideline, introduced in March 2022, has hindered banks from acting as custodians of digital assets by requiring them to record crypto holdings as liabilities on their balance sheets.

The resolution, introduced by Republican congressman Mike Flood and Democrat representative Wiley Nickel, seeks to remove these obstacles and ensure consumer protection by allowing highly regulated banks to provide crypto custody services.

During the Feb. 29 markup hearing, the committee voted 31-20 in favor of the resolution, with members from both sides of the aisle supporting it.

The resolution argues that SAB 121 exceeds the scope of an accounting bulletin and effectively functions as a de-facto law, impacting banks' regulatory obligations such as capital and liquidity requirements.

However, the resolution still needs to pass a full floor vote in the House and the Senate before SAB 121 can be overturned, indicating ongoing efforts to provide clarity and regulatory certainty in the crypto custody space.

While some lawmakers, including crypto-friendly Republican Congressman Tom Emmer, have criticized SAB 121 for introducing unnecessary concentration risk into the crypto ecosystem, others, like Democrat Congresswoman Maxine Waters, have expressed concerns about blocking the SEC from providing clarity on crypto-related regulations.

Despite being non-binding guidelines, SABs play a crucial role in guiding how companies should account for customer crypto holdings, highlighting the importance of this resolution in shaping the regulatory landscape for cryptocurrency custody services.

SEC’s Hester Peirce wants more decentralization in the financial system

SEC Commissioner Hester Peirce, known as "Crypto Mom" for her supportive stance on the crypto industry, has advocated for increased decentralization in the U.S. financial system.

Speaking at the ETHDenver conference, Peirce highlighted the risks associated with centralization, emphasizing that decentralized systems can bring resilience and strength to the financial system.

She expressed a desire to see more decentralization, as central points of control in the financial system are a cause for concern.

Peirce also addressed concerns about proposed legislation that could classify decentralized technologies, such as network nodes and noncustodial wallets, as financial institutions.

She described this as troubling and highlighted the confusion surrounding who would be required to register under such regulations.

Peirce acknowledged the challenges faced by the SEC in regulating decentralized technologies, noting that the concept of decentralization is fundamentally different from traditional regulatory frameworks.

Regarding the SEC's role in regulating crypto, Peirce emphasized the importance of providing clear rules and guidelines to allow projects to grow and become decentralized without facing legal threats.

She stated that the SEC's primary role is to identify where securities laws apply, ensure adequate disclosure, and empower individuals to make informed decisions.

Peirce's comments reflect a nuanced approach to crypto regulation, balancing the need for investor protection with the promotion of innovation and decentralization in the financial system.

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