Blackrock launches new ETF in Europe while Central Bank reaches only halfway into its CBDC research

  • The newly launched iShares Blockchain Technology UCITS ETF from Blackrock will specifically track 35 blockchain and crypto companies’ index.
  • The European Central Banks’ CBDC investigation has completed one of its two-year research phase.
  • Europe’s Central Bank is also considering implementing limits to curb the digital Euro’s use as a form of investment.

While crypto is a rapidly developing market, it comes with its own concerns since not every investor is well versed with blockchain technology or comfortable with the market’s volatility. 

Thus such investors turn to the investment vehicles they are familiar with but demand the benefits of the crypto market, giving room to the development of ETFs. These ETFs (Exchange Traded Funds) are becoming a favorite for many people, giving rise to newer ETFs such as this one from Blackrock.

The blockchain companies ETF

The world’s largest asset management company, BlackRock, announced the launch of its newest ETF on Thursday. The iShares Blockchain Technology UCITS ETF is a deviation from the cryptocurrency ETF and instead focuses on blockchain and crypto companies. 

Providing exposure to over 35 different companies from all around the world, the ETF tracks the New York Stock Exchange FactSet Global Blockchain Technologies capped index.

Launched for the company’s European customers, the product strategist for thematic and sector ETFs at BlackRock, Omar Moufti, stated,

“We believe digital assets and blockchain technologies are going to become increasingly relevant for our clients as use cases develop in scope, scale and complexity. The continued proliferation of blockchain technology underscores its potential across many industries.”

While crypto and affiliated investment options are noting increasing demand, the European Central Bank is also pushing itself to establish a centralized digital currency system.

ECB bringing its digital Euro

The European Central Bank (ECB) released the first progress report on September 29 about its two-year-long research phase on the digital Euro. As the investigative phase reached its halfway point, the ECB report elaborated on the foundational design options that were recently endorsed by the Governing Council.

The Central Bank decided upon certain design and policy issues, including exploring a digital Euro solution where transactions would be made online and validated by a third party. In the case of offline transactions, a validated peer-to-peer solution will be explored.

Furthermore, the Eurosystem will also consider the possibility of incorporating limit and remuneration-based tools for the digital Euro in order to curb its use as a means of investment. Explaining the same, the report read,

“Quantitative limits on the holdings of individual users would limit individual take-up and the speed of deposit conversion, while remuneration-based tools could be calibrated to make large digital euro holdings above a certain threshold unattractive compared to other highly liquid and low-risk assets.”

Thus, the ECB stated that further steps need to be taken before a digital euro could be introduced, and for the same, the European Commission will also propose regulation in Q1 2023.

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