25 February, 2024

Franklin Templeton Files for Spot Ethereum ETF Launch, Awaits Approval

2 weeks ago

13 Feb, 2024

  • Franklin Templeton files for the SEC’s approval of a Spot Ethereum ETF launch.
  • The asset manager sees ETF as an investment similar to directly investing in Ether.
  • The filing has hinted at the firm’s intention to stake a portion of the fund’s ETH to generate additional income.

In an astounding development in the ETF market, asset manager Franklin Templeton has filed for a Spot Ethereum ETF approval. According to the S-1 filing, the asset manager’s “Franklin Ethereum ETF” will be listed and traded on the Cboe BZX Exchange, Inc. after the approval.

Franklin Templeton acknowledged the ETF launch as an “investment similar to an investment in ether relative to acquiring, holding and trading ether directly on a peer-to-peer or other basis or via a digital asset platform.” They added,

The Shares have been designed to remove obstacles associated with the complexities and operational burdens involved in a direct investment in ether by providing an investment with a value that reflects the price of the ether owned by the Fund at such time, less the Fund’s expenses.

The other leading asset managers that have already applied for the Spot Ethereum ETF launch include Grayscale, BlackRock, Fidelity, Ark and 21Shares, VanEck, Invesco and Galaxy, and Hashdex. James Seyffart, Bloomberg’s Senior ETF analyst, recently shared an X post, drawing the community’s attention to Franklin Templeton’s entry into the Ethereum ETF rally.

As per the filing, Coinbase Custody Trust Company and the Bank of New York Mellon would serve as the custodians for ether and cash holdings, respectively. In addition, the firm envisions staking a portion of the exchange-traded fund’s Ether to generate extra income. The asset manager explained, “In consideration for any staking activity in which the Fund may engage, the Fund would receive certain staking rewards of ether tokens, which may be treated as income to the Fund.”

While the SEC reportedly delayed the decision on approving Ethereum ETFs, Seyffart asserted that the delay was expected and more delays would follow. Estimating the potential ETF approval, Seyffart stated in an X post, “The only date that matters for spot Ethereum ETFs at this time is May 23.”