Reserving a seat at a celebrity chef’s restaurant with a 3-month wait has proven to be an easier task than getting a cryptocurrency-related exchange-traded fund (ETF) on a major U.S. exchange. Call it due diligence by U.S. regulators, but in the long term, this means that the U.S. could lose in the end of a “global technology race” according to some analysts.
Facebook’s crypto project “Lira” is finding out quickly that launching any effort involving cryptocurrencies in the U.S. will face resistance.
“While bashing Facebook is good politics, neglecting the traditional role of the United States in welcoming the growth of innovative technology is not,” the Blockchain Association, a Washington, D.C. lobbying group for cryptocurrency and blockchain, said in a blog post last month. “Congress should focus on nurturing open blockchain networks before the United States loses out in this global technology race.”
Treasury Secretary Steven Mnuchin cited security issues regarding Facebook’s lira as a prime obstacle in getting the project off the ground. Mnuchin has had various meetings with Facebook representatives on lira and until it meets anti-money laundering standards, bringing the crypto project into fruition will be a hefty task.
“I think they realized that they’re not ready, they’re not up to par,” Mnuchin said. “I assume some of the partners got concerned and dropped out until they meet those standards.”
Some analysts, however, see options that U.S. regulators can take in the meantime.
“If governments and regulators are concerned about their control over monetary systems and money flows, the best defense would be a good offense,” said Lisa Ellis, senior equity analyst at MoffettNathanson. “It would behoove regulators in the U.S. and Europe over the long term to maintain their leadership given that the dollar, the euro and the yen are used as proxies for global reserve currencies.”
Investors looking to take advantage of blockchain-related technologies in the exchange-traded fund (ETF) space can look to funds that focus on the innovation, such as the Amplify Transformational Data Sharing ETF (NYSEARCA: BLOK). The fund seeks to provide investors with total return.
Furthermore, BLOK is an actively managed ETF that seeks to provide total return by investing at least 80% of its net assets (including investment borrowings) in the equity securities of companies actively involved in the development and utilization of transformational data sharing technologies. It may invest in non-U.S. equity securities, including depositary receipts.
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