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Franklin Templeton submitted a Bitcoin and Ethereum index ETF (exchange-traded fund) proposal to the US 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 filing awaits SEC approval. According to the filing, it stands out as the first ETF to hold both BTC and Ether, positioning it as a distinctive asset in the digital currency ETF market.
If approved, Franklin Crypto Index ETF shares will be issued in blocks of 50,000, with the value tied to the net asset value (NAV) of the Bitcoin and Ether held by the fund. Importantly, the fund will not directly engage in staking or income-generating activities with its digital assets.
The index aims to offer indirect exposure to Bitcoin and Ethereum, mitigating the typical volatility associated with these cryptocurrencies. Instead, BTC and ETH will be held through a proxy, with the trust’s assets composed of Bitcoin, Ethereum, cash, and short-term financial instruments.
Read more: Crypto ETN vs. Crypto ETF: What Is the Difference?
Notably, 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 — 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 agreements with regulated futures markets to guarantee the safe and transparent trading of the underlying assets.
Unlocking New Asset Management Capabilities
The prospective Bitcoin and Ethereum Index marks Franklin Templeton’s second major move into blockchain technology in just 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 blockchain Aptos.
This tokenization initiative allows institutional investors to access the asset directly through their digital wallets, using Franklin Templeton’s blockchain-integrated Benji Investments platform and its BENJI token. The fund is also active on Stellar, Polygon, Arbitrum, and Avalanche blockchains.
In addition, Franklin Templeton remains heavily involved in the ETF market, 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: What is Tokenization on Blockchain?
These developments highlight growing interest in decentralized finance (DeFi) among traditional finance (TradFi) players. However, uncertainties around regulatory frameworks could hinder wider adoption of TradFi-to-DeFi integration.