Investment giant Morgan Stanley has given more details on its proposed Bitcoin exchange-traded fund (ETF) in a filing with the US Securities and Exchange Commission.
According to the prospectus, the fund, called the Morgan Stanley Bitcoin Trust, plans to use Coinbase Custody and Bank of New York Mellon (BNY) to safeguard its Bitcoin holdings.
During the formation and redemption of ETF shares, both institutions will be in charge of safely keeping the cryptocurrency and enabling transfers. To lower the danger of hacking, the majority of Bitcoin will be stored in offline cold-storage vaults, where private keys are maintained offline.
The document does point out that while the ETF is processing transactions, certain assets might momentarily shift to trading wallets.
Additionally, BNY will have a variety of functions within the framework. The bank will oversee accounting, shareholder records, and cash movements in its capacity as administrator, transfer agent, and cash custodian.
The ETF will function as a passive investment vehicle, which means that instead of employing derivatives, it will monitor the price of Bitcoin by holding the asset directly.
The CoinDesk Bitcoin Benchmark 4PM New York Settlement Rate, which compiles trade data from significant exchanges, will be used by the trust to determine its daily net asset value.
If authorized, the ETF might offer institutional investors an additional regulated avenue to access Bitcoin through conventional financial markets.
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