Main Points:
- Generic Listing Standards Developed: The U.S. Securities and Exchange Commission (SEC) is designing a one-size-fits-all rule for token-based ETFs, allowing issuers to skip the lengthy 19b-4 filing if certain metrics are met.
- Faster Approval via S-1 Only: Instead of dual filings (S-1 plus 19b-4), issuers may only need an S-1, followed by a 75-day quiet period before listing.
- Key Metrics Under Review: Indicators like market capitalization, trading volume, and liquidity thresholds are expected to form the backbone of the new standard.
- Operational Efficiency Gains: Both ETF issuers and the SEC stand to reduce paperwork, comment cycles, and administrative delays.
- Coinbase and Custody Dynamics: With roughly $140 billion in crypto ETFs under management—of which $113.4 billion (81%) is custodied by Coinbase—this shift may benefit major custodians and reshape competitive dynamics.
- Stablecoin Regulatory Milestones: The Senate’s passage of the GENIUS Act sets strict reserve and auditing requirements for U.S. dollar–pegged stablecoins, paving the way for more institutional adoption.
- Industry Outlook: A flurry of ETF applications, rising altcoin ETF approval odds, and major players like Circle positioning for bank charters signal accelerating integration of crypto into traditional finance.
1. SEC’s Move Toward Generic Listing Criteria
The SEC’s Division of Corporation Finance is reportedly in advanced discussions with ETF issuers and exchanges to create a generic rule for token-based exchange-traded funds (ETFs). Under this framework, if a crypto token satisfies predefined thresholds—such as market cap, on-exchange trading volume, and daily liquidity—issuers could bypass the established 19b-4 rule-change filing and proceed with only an S-1 registration statement.
Traditionally, every new ETF listing required two separate approvals:
- S-1 registration (detailing product structure, risks, and assets), followed by a staff review.
- 19b-4 rule-change (exchange-initiated request to list the ETF).
By consolidating approval under the S-1, projects could benefit from a more predictable 75-day waiting window—the statutory maximum for S-1 reviews—shrinking timelines and cutting back iterative SEC comments.
2. Impact on the Listing Process: S-1 vs 19b-4
S-1 Registration
The S-1 demands a comprehensive disclosure of an ETF’s mechanics, risk factors, fee structure, and asset composition. Once filed, issuers face a 75-day review clock before they can proceed to listing.
19b-4 Rule-Change
Form 19b-4 is the exchange’s petition to the SEC for permission to trade a new ETF. It has historically been the bottleneck, often subject to public comment and extended staff queries.
Potential Savings:
- Faster Time to Market: Eliminating 19b-4 could shave weeks off approval cycles.
- Reduced Administrative Overhead: Less back-and-forth between issuers, exchanges, and the SEC.
- Market Responsiveness: Issuers can launch products more quickly in response to emerging trends, such as new altcoin ETFs.
3. Key Metrics Under Consideration
Sources point to three flagship criteria forming the backbone of the new standard:
- Market Capitalization: A minimum token market cap to ensure sufficient scale and stability.
- Trading Volume: Average daily on-exchange volume thresholds to guarantee price discovery.
- Liquidity: Bid-ask spread and order-book depth requirements to limit market manipulation.
While precise thresholds remain undisclosed, these metrics align with both industry best practices and existing guidance for spot Bitcoin ETFs. As crypto’s frontier expands into altcoins—such as potential Solana, XRP, or Dogecoin ETFs—consistency in standards becomes crucial.
4. Benefits for Issuers and the SEC
By streamlining filings, both sides anticipate:
- Operational Efficiency: Less time spent preparing duplicate filings and responding to separate comment letters.
- Resource Reallocation: SEC staff can redirect focus from routine filing reviews to novel products or enforcement priorities.
- Increased Competition: Lower barriers for new entrants, potentially catalyzing a wave of innovative token-based ETFs.
5. Implications for Coinbase and the Custody Landscape
Crypto custodians stand at the nexus of ETF infrastructure. Data indicates that U.S. spot Bitcoin ETFs now manage roughly $140 billion in assets, with 81% (≈$113.4 billion) stored by Coinbase.
<aside> **Figure 1. Crypto ETF AUM by Custody Provider** </aside> The bar chart above illustrates how dominant custody providers like Coinbase could further solidify their market positions if ETF listings accelerate under the new framework.
6. Recent Industry Developments and Trends
Senate Passes GENIUS Act for Stablecoins
On June 17, 2025, the U.S. Senate approved the GENIUS Act by a 68–30 vote, establishing the first federal framework for U.S. dollar–pegged stablecoins. It mandates:
- Full Reserve Backing in liquid, safe assets.
- Monthly Independent Audits.
- AML/KYC Compliance.
The bill now moves to the House, where passage could transform stablecoins into a $250 billion regulated market.
Circle’s National Trust Bank Application
Circle Internet Group filed with the OCC to create a national trust bank—First National Digital Currency Bank, N.A.—to manage its USDC reserves (~$61.6 billion in circulation) and offer institutional custody services. This aligns with the GENIUS Act’s reserve requirements and signals deeper integration of stablecoin issuers into regulated banking.
Rising Approval Odds for Altcoin ETFs
Bloomberg analysts Eric Balchunas and James Seyffart raised their odds of altcoin ETF approvals to over 90% by year-end 2025, citing constructive engagement with the SEC on generic listing standards and recent S-1 amendment requests for Solana ETF issuers. If realized, this could diversify institutional flows beyond Bitcoin and Ethereum.
7. Outlook for Crypto ETFs and Blockchain Applications
With streamlined approvals, institutional adoption is poised to accelerate. Potential next steps include:
- Broader Token Coverage: Launches of spot ETFs for liquidity-rich altcoins.
- Innovative Structures: ETFs with staking or lending integrations, offering yield alongside price exposure.
- Enterprise Use Cases: TradFi giants may embed token-based funds into retirement products or corporate treasuries.
Emerging market entrants and custodians alike must prepare for a more vibrant, fast-moving ETF ecosystem, where operational agility and robust compliance frameworks become competitive differentiators.
Conclusion
The SEC’s push to establish generic listing criteria marks a watershed moment for token-based ETFs, promising faster approvals, lower costs, and heightened market responsiveness. Coupled with stablecoin legislation and banking charters for issuers like Circle, the regulatory landscape is evolving to embrace crypto’s maturation. For investors hunting new digital assets or revenue streams, this climate offers unprecedented access to innovative ETF products and blockchain integrations. As altcoin ETF approval odds soar and custodians reinforce their infrastructure, stakeholders should position themselves at the forefront of this accelerating convergence between crypto and traditional finance.
