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Securities and Exchange Commission Delay Ruling on Latest ETFs

Bitcoin

The US Securities and Exchange Commission has pushed back the date for a decision on a number of proposed bitcoin exchange traded funds, delaying what many consider could be a significant development for the cryptocurrency space.

According to reports emerging this week, the Securities and Exchange Commission is postponing its ruling on the five bitcoin exchange traded funds filed by Direxion Investments until September of this year.

The fund proposals, originally filed with the regulator in January of this year, will establish exchange-traded assets based on bitcoin prices, with one of the funds matching bitcoin’s price moves and the remaining four funds trading off the currency’s price fluctuations.

The decision, which was revealed in documents published this week, suggest the SEC is looking for more time to consider the proposed rule change, a necessary precursor to listing an ETF of this kind.

"The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, ... designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change."

According to the reports, the SEC has had only two comments on the proposals to date, which some analysts have consider a positive sign.

An ETF approval would see bitcoin bridge the gap with the mainstream world, in arguably one of the most significant ways to date. While a number of bitcoin and cryptocurrency ETFs have been filed, none have thus far received the green light.

The prospect of an ETF is one that excited cryptocurrency enthusiasts, representing a nod of approval from the mainstream financial world. However, some analysts take the view that the SEC would be ‘insane’ to approve an ETF at the moment.

Michael Cohn from Atlantis Asset Management said the reason for the hold up in approval is that regulators aren’t yet ready to be seen endorsing bitcoin in this way.

“Then they're putting a rubber stamp on it as an asset, and I don't think governments want to go there yet. It just seems as though it's not something I'd want to put my clients into in any way, shape or form. You can only be embarrassed.”

Coinbase Launches Partnership with WeGift for Crypto Gift Cards

Coinbase has today launched a partnership with gift card startup WeGift to provide customers with access to cryptocurrency-powered gift cards across Europe.

According to reports in Bloomberg, Coinbase wallets will be integrated within the WeGift platform from today, allowing consumers to buy gift cards for cryptocurrency, which can then be used to buy a range of retail goods.

Users can spend cryptocurrency from their Coinbase wallets on gift cards redeemable at over 120 different retailers, including the likes of Uber, Costa, Google Play, Tesco and M&S. At the moment, the exchange supports bitcoin, bitcoin cash, litecoin and ethereum, with plans for a number of other cryptocurrencies to be added in the near future.

At the moment, the service is restricted to specific European markets: the UK, the Netherlands, France, Italy and Spain. However, the rollout ties in with similar moves from Coinbase in the past, including a partnership with US-based gift card firm eGifter back in 2013.

As one of the largest cryptocurrency exchange and wallet services of its kind, Coinbase already benefits from extensive market reach, with tens of millions of wallets operating on its platform.

The partnership with WeGift is expected to deliver access to millions of cryptocurrency-savvy consumers in Europe, and could serve as a model for others to follow in the gift card and retail loyalty use cases.

The development comes at an exciting time for Coinbase, after they secured an e-money license in the UK from the national markets regulator, the Financial Conduct Authority. The license allows Coinbase to issue digital cash and digital cash proxies, as well as enabling them to provide payment services in the UK.

The license typically covers services involved in online, phone and cash payments, which Coinbase is ultimately anticipating offering through its platform. In comments made at the time, Coinbase said the move would bring the company in line with other regulated financial institutions.

"We are committed to making sure customer funds are always secure and this update means that our e-money operations have safeguards and operational standards at par with other regulated financial institutions. An example of this is segregation of client funds, where all customer fiat balances will be separated from Coinbase's funds and kept in separate bank accounts."

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