Franklin Templeton, a powerhouse in asset management, has officially launched the “Franklin Ethereum TR Ethereum ETF,” now listed on the Depository Trust and Clearing Corporation (DTCC) under the ticker EZET. This marks a significant step for the firm as it enters the competitive field of cryptocurrency exchange-traded funds (ETFs).
Listing and Regulatory Hurdles
The Ethereum spot ETF’s listing on the DTCC signifies its readiness for creation and redemption, essential mechanisms that ensure the ETF’s shares align with market demand and its net asset value. However, it’s important to note that this listing does not imply approval from the U.S. Securities and Exchange Commission (SEC) for the S-1 filing required for a spot Ether ETF.
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The SEC has postponed its decision on the ETF until June 11, extending the review period by 45 days. This additional time will allow the SEC to further evaluate the proposed rule change for trading Franklin Ethereum Trust shares on the Cboe BZX Exchange.
Industry Context and Competitive Landscape
Franklin Templeton’s entry into the Ethereum ETF arena places it among other industry leaders like BlackRock, Grayscale, VanEck, and ARK Invest, all vying for a foothold in the emerging market of cryptocurrency funds. Unlike Bitcoin ETFs, Ethereum-based funds face a different regulatory and market environment, reflecting the SEC’s cautious approach to cryptocurrency as an asset class.
Eric Balchunas, a Bloomberg ETF analyst, previously estimated the likelihood of the SEC approving a spot Ether ETF by May at about 35%, influenced by SEC Chair Gary Gensler’s unclear stance on whether Ether is considered a security under regulatory law.
