U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has suggested that in-kind redemptions for cryptocurrency exchange-traded funds (ETFs)—a structure favored by firms like BlackRock—could soon become a reality.
Speaking at a panel hosted by the Bitcoin Policy Institute, Peirce responded to questions about the potential shift from cash-based to in-kind creation and redemption mechanisms for spot Bitcoin ETFs.
“Those [filings] are going through the process now,” Peirce said. “I think that’s something that’s certainly on the horizon at some point. I can’t prejudge, but we hear that there’s a lot of interest.”
What Are In-Kind Redemptions?
In-kind redemptions allow ETF shares to be exchanged directly for the underlying asset—in this case, Bitcoin—instead of settling in cash. Many institutional players, including BlackRock and Fidelity, argue that in-kind processes reduce friction, lower tax implications, and improve ETF efficiency, especially for high-volume crypto products.
In January, Nasdaq submitted a Form 19b-4 on behalf of BlackRock requesting approval for the switch to in-kind structures. Several other firms have since followed suit.
Industry Push Could Mark Next Phase of ETF Evolution
While the SEC initially approved cash-only models when greenlighting spot Bitcoin ETFs in early 2024, the industry has continued to push for a more traditional in-kind model, commonly used in equity ETFs.
Peirce’s comments signal that the agency is actively reviewing the proposals, though no formal decision timeline has been announced.
If approved, the shift could mark a major evolution in how crypto ETFs operate, potentially increasing efficiency and adoption by institutional investors.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/secs-hester-peirce-says-in-kind-redemptions-for-bitcoin-etfs-on-the-horizon/