BlackRock, the world’s largest investment manager, is currently having extensive conversations with the U.S. Securities and Exchange Commission (SEC). We spoke with them about their efforts to help shape the still-evolving landscape of digital assets. These discussions, particularly those concerning Exchange-Traded Products (ETPs) with staking capabilities and the broader implications of tokenization, signal a significant step towards mainstream adoption of cryptocurrencies.

BlackRock's Dialogue with SEC on Crypto Innovations

Overview of BlackRock's Engagement with the SEC

On May 9, 2025, BlackRock met with the SEC’s newly established Crypto Task Force. Each of them gave an update on what they’re doing with digital assets. Register now for one or all of these fantastic offerings. Among those are the iShares Bitcoin Trust (IBIT), the iShares Ethereum Trust (ETHA), and the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). That meeting served to highlight BlackRock’s dedication to looking through the regulatory fog looming around digital assets. He stressed the need for clarity and collaboration to encourage innovation without sacrificing investor protection.

The debate further made its way to the standards for approval of crypto-based ETPs. BlackRock wanted to know what the SEC’s stance would be on staking, especially when it comes to ETPs that have it built-in. This is especially important for developing complex investment products, which can help provide better yields to investors via staking rewards. BlackRock further asked whether a temporary policy or roadmap could be provided to help issuers navigate the approval process.

BlackRock’s move to engage proactively with the SEC underscores its ambition to help determine the future of digital assets. BlackRock is responding to criticism and regulatory concerns with a straightforward approach. They’re working on novel financial instruments to provide investors with improved exposure to the cryptocurrency market. This ranges from the potential for assets to be tokenized to staking mechanisms being incorporated into traditional investment vehicles.

Implications for the Future of Crypto Staking

BlackRock’s ongoing dialogue with the SEC is incredibly important for the future of crypto staking. The purpose of this post is to highlight how staking is likely to be viewed under applicable regulation, and specifically as part of ETPs. Staking is the process of holding and “locking” your crypto assets to help run a blockchain network and validate transactions. By taking part in staking, token holders can stake their tokens and earn thrilling rewards. Bringing staking into ETFs would give investors another way to make money off their crypto investments.

Nate Geraci, president of The ETF Store, among others, still have conviction that a filing will materialize as we wait for the regulatory dust to settle. Specifically, he argues it won’t be long until the SEC approves staking in ETFs. As we’ve reported, BlackRock is focusing on BTC & ETH ETFs first, & is seeking explicit clarity on staking in ETPs.

The potential approval of staking in ETFs has a very real chance to revolutionize the way everyday investors engage with cryptocurrencies. This new system is a controlled and open method for people and organizations to engage with the staking process. In doing so, it may increase market adoption and liquidity as a result. Regulatory clarity is key. It makes sure that these products are designed with investor protection and market integrity baked in.

BlackRock and SEC Discuss Staking in ETFs – Is Approval on the Horizon?

Current Status of ETF Applications

The crypto ETF arena is currently booming with speculative hopes. With today’s announcement there are now 72 crypto-related ETFs pending SEC approval to list or list options. The SEC's recent approvals for options trading of spot Ethereum ETFs, including BlackRock's, signify a promising step towards further market accessibility.

Both Grayscale and Fidelity have filed for rule changes that would permit this functionality. As a result, the desire to include staking in ETFs to offer investors better yields has increased. It’s important to remember that staking for Ether ETFs has been controversial at various times during 2025 so far. So the recent SEC approvals for options trading on spot Ethereum ETFs, most lately BlackRock’s, has been huge! These works, along with others, open the door to more accessible markets.

We think the separate approval process for these ETFs necessitates a closer look. Other experts evaluate important considerations such as market surveillance, protecting investors, and minimizing opportunities for fraud and manipulation. The SEC's engagement with industry leaders like BlackRock is crucial in addressing these concerns and establishing a clear regulatory framework.

Potential Impact of Approval on the Market

If the SEC ultimately approves ETFs with staking capabilities, the positive effect on the crypto market would be profound.

There are potential challenges associated with the approval of staking ETFs:

  • Increased Institutional Investment: ETFs provide a familiar and regulated investment vehicle for institutional investors who may have been hesitant to directly hold cryptocurrencies.
  • Greater Market Liquidity: The introduction of staking ETFs could attract more capital into the crypto market, increasing liquidity and reducing price volatility.
  • Enhanced Investor Access: ETFs make it easier for retail investors to gain exposure to cryptocurrencies without the need to directly manage digital assets.
  • New Revenue Streams: Staking rewards generated by ETFs could provide investors with a new source of passive income.

Tokenization refers to the process of converting real-world assets into digital tokens that exist on a blockchain. This consists of purchase of commodities, real estate, and securities. This process offers several benefits:

  • Regulatory Uncertainty: The regulatory landscape for crypto assets is still evolving, and there is a risk that future regulations could negatively impact the performance of staking ETFs.
  • Security Risks: Staking involves entrusting assets to a third party, which introduces security risks such as hacking or theft.
  • Complexity: Staking can be a complex process, and investors may not fully understand the risks and rewards involved.

Exploring Tokenization and Crypto ETP Approval Standards

Understanding Tokenization in the Crypto Space

From an American perspective, BlackRock’s desire for tokenization can be seen in their BlackRock USD Institutional Digital Liquidity Fund (BUIDL). BUIDL provides institutional investors with exposure to U.S. dollar-denominated assets completely on a blockchain using the BUIDL as a tokenized fund. This new initiative further proves BlackRock’s confidence in the power of tokenization to reshape the financial industry.

  • Increased Liquidity: Tokenized assets can be easily traded on digital exchanges, increasing liquidity and reducing transaction costs.
  • Fractional Ownership: Tokenization allows for fractional ownership of assets, making it possible for smaller investors to participate in markets that were previously inaccessible.
  • Transparency: Blockchain technology provides a transparent and immutable record of ownership, reducing the risk of fraud and improving trust.
  • Efficiency: Tokenization streamlines the process of buying, selling, and managing assets, reducing administrative overhead and settlement times.

The SEC’s rigorous standards for approving new crypto ETPs are there to protect investors and promote healthy markets. These standards typically focus on:

Standards for Crypto ETP Approval and Their Significance

The SEC's cautious approach to approving crypto ETPs reflects the agency's commitment to investor protection. By carefully evaluating each application and addressing potential risks, the SEC aims to create a regulatory framework that fosters innovation while safeguarding investors' interests. The conversation between BlackRock and the SEC regarding the criteria for approving crypto-based ETPs and the possible establishment of a temporary framework to guide issuers highlights the ongoing effort to balance innovation with regulatory oversight.

  1. Market Surveillance: Ensuring that there are robust market surveillance mechanisms in place to detect and prevent fraud and manipulation.
  2. Custody: Requiring that crypto assets are held in secure custody by qualified custodians.
  3. Valuation: Establishing clear and transparent valuation methodologies for crypto assets.
  4. Liquidity: Assessing the liquidity of the underlying crypto assets and the potential impact on the ETP's performance.

If Bitcoin were to surpass $100,000, several factors would likely contribute to such a surge:

Bitcoin Surpasses $100,000 – Market Reactions and Predictions

Factors Contributing to Bitcoin's Price Surge

Bullish market sentiment and increasing awareness of Bitcoin’s potential can be potent forces driving up its price. Combined, they have the power to send Bitcoin’s price soaring to new all-time highs.

  • Increased Institutional Adoption: Greater acceptance and investment from institutional investors, such as hedge funds, pension funds, and corporations.
  • Regulatory Clarity: Clear and favorable regulations that provide legal certainty for crypto businesses and investors.
  • Mainstream Adoption: Wider adoption of Bitcoin as a medium of exchange and store of value by individuals and businesses.
  • Inflation Hedge: Growing demand for Bitcoin as a hedge against inflation and currency devaluation.
  • Halving Events: Reduced supply of new Bitcoins entering the market due to halving events, which occur approximately every four years.

The future of the crypto market will likely be shaped by several key trends:

Future Trends and Investor Sentiment

Regardless of these underlying pressures, investor sentiment will be key to determining how these trends continue to manifest. Bullish sentiment as a catalyst for more bullish momentum in the crypto market. This wave of momentum is driven by today’s regulatory clarity, technological innovation and growing adoption. Negative sentiment, triggered by regulatory setbacks, security breaches, or market volatility, could lead to price corrections and reduced investment activity.

  • Continued Institutionalization: More institutional investors will enter the crypto market, bringing greater capital and sophistication.
  • Regulatory Development: Regulators around the world will continue to develop and refine their approach to crypto assets, providing greater clarity and certainty.
  • Innovation in DeFi: Decentralized finance (DeFi) will continue to evolve, offering new and innovative financial products and services.
  • Growth of NFTs: Non-fungible tokens (NFTs) will continue to gain traction, representing ownership of unique digital assets.
  • Increased Focus on Sustainability: The crypto industry will increasingly focus on reducing its environmental impact and promoting sustainable practices.

BlackRock's ongoing engagement with the SEC and its exploration of innovative financial instruments demonstrate its commitment to shaping the future of digital assets. The crypto market is always changing. Working together will be key for industry leaders and regulators alike to foster innovation, protect investors, and maintain the integrity of our markets.

BlackRock's ongoing engagement with the SEC and its exploration of innovative financial instruments demonstrate its commitment to shaping the future of digital assets. As the crypto market continues to evolve, collaboration between industry leaders and regulators will be essential to foster innovation while protecting investors and maintaining market integrity.