Franklin Templeton has submitted a Bitcoin and Ethereum index ETF (exchange-traded fund) proposal to the U.S. Securities and Exchange Commission (SEC).
If the securities regulator approves the application, it could see the global asset management giant combine and offer Bitcoin (BTC) and Ethereum (ETH) in a single fund.
Franklin Templeton Files for Bitcoin and Ethereum Index ETF
Franklin Templeton’s pending Bitcoin and Ethereum index ETF application is awaiting approval from the SEC. According to the application, it stands out as the first ETF to hold both BTC and ETH, positioning it as a distinct asset in the crypto ETF market.
Therefore, if approved, shares of the Franklin Crypto Index ETF will be issued in blocks of 50,000, with the value pegged to the net asset value (NAV) of the Bitcoin and Ether held by the fund. The fund will not directly engage in staking or income-generating activities with its digital assets.
The index aims to provide indirect exposure to Bitcoin and Ethereum, mitigating the typical volatility associated with these cryptocurrencies. Instead, BTC and ETH will be held through a proxy. In this way, the fund will be composed of, in addition to the two cryptocurrencies, cash and short-term financial instruments.
Read more: What is a Bitcoin ETF?
However, the index will have a maturity of less than three months, reflecting its performance based on a benchmark designed to track the largest digital assets — the CF Institutional Digital Asset Index — that is aligned with current capital markets.
BNY Mellon, the American investment banking firm, will act as the fund’s custodian and transfer agent, overseeing its operations. Coinbase Custody will manage the digital assets.
However, the SEC’s decision to approve or deny the application will depend on anti-fraud measures related to regulated futures markets. The agency typically approves crypto ETFs after ensuring robust protections against fraud and manipulation.
In response, the proposal highlights existing oversight arrangements with regulated futures markets to ensure safe and transparent trading of underlying assets.
Unlocking new asset management capabilities
The prospective Bitcoin and Ethereum index marks Franklin Templeton’s second major foray into blockchain in the short span of two days. As reported by BeInCrypto, the asset management giant recently launched the Franklin Onchain U.S. Government Money Fund (FOBXX) on the layer-1 (L1) Aptos blockchain.
This tokenization initiative allows institutional investors to access the asset directly through their digital wallets, using Franklin Templeton’s blockchain-integrated platform, Benji Investments, and its BENJI token. The fund is also active on the Stellar, Polygon, Arbitrum and Avalanche blockchains.
Additionally, Franklin Templeton remains heavily involved in the ETF space, offering institutional investors access to Bitcoin and Ethereum through its EZBC and EZET ETFs. The firm is also planning a mutual fund on Solana.
Read more: How to Buy Solana (SOL) and Everything You Need to Know
These developments highlight the growing interest in decentralized finance (DeFi) among traditional finance (TradFi) players. However, uncertainties surrounding regulatory frameworks may hinder wider adoption of TradFi-DeFi integration.
The article Financial giant proposes Bitcoin and Ethereum ETF; understand was first seen on BeInCrypto Brazil.
