US SEC considers proposal to modify BlackRock spot Bitcoin ETF to allow physical redemption

PANews February 7th news, according to The Block, the U.S. Securities and Exchange Commission (SEC) is considering a proposal that will change BlackRock's spot Bitcoin ETF to allow for physical redemption. In a document released Thursday, the SEC acknowledged the proposal and requested comments to be submitted within 21 days of its document being published in the Federal Gazette. Under the document, the SEC can then decide to approve, deny, or “start the program.”

According to Form 19b-4 documents, Nasdaq released a revised rule file on behalf of BlackRock last month that will allow iShares Bitcoin Trust to undergo physical redemption and creation. More than a year ago, companies were discussing technical details about how the redemption process for the product works when the SEC was considering whether to approve spot Bitcoin ETFs. The SEC prefers a cash model, which requires BlackRock to remove Bitcoin from storage, sell it immediately, and then return the cash to investors. The SEC later approved BlackRock's spot ETF proposal and other proposals in January 2024.

In a post on the X platform, James Seyffart, an analyst at Bloomberg think tank, said in a post on the X platform that changing the redemption and creation process does not mean that individual investors will be able to trade in physical goods, and only authorized participants can do it.