Ben Strack

<div id="highlights-block_621fe7d1b1390" class="highlights">
 <ul>
 <li>The filing by Charles Schwab’s asset management arm follows similar proposals by competitors BlackRock and Fidelity Investments</li>
 <li>Charles Schwab CEO Walt Bettinger called cryptocurrencies “hard to ignore” in January</li>
 </ul>
 
</div>



Charles Schwab’s asset management arm is looking to join the crypto ETF fray, following industry heavyweights like BlackRock and Fidelity Investments.



The fund group filed to launch an index-tracking ETF offering exposure to companies involved with digital assets, as well as business activities connected to blockchain technology, according to <a href="https://www.sec.gov/Archives/edgar/data/1454889/000110465922029220/tm226059d1_485apos.htm" target="_blank" rel="noreferrer noopener">a Wednesday regulatory disclosure</a>.



The proposed Schwab Crypto Economy ETF plans to invest at least 80% of net assets in stocks included in the Schwab Crypto Economy Index. The filing did not list a ticker or expense ratio.



The fund would not invest in digital assets directly.



A spokesperson for the company did not immediately return a request for comment.



Charles Schwab CEO Walt Bettinger told Bloomberg in January <a href="https://cms.blockworks.co/ceo-of-financial-services-giant-charles-schwab-calls-cryptocurrencies-hard-to-ignore/" target="_blank" rel="noreferrer noopener">cryptocurrencies are “hard to ignore”</a> and “fairly significant.”



A Schwab spokesperson <a href="https://cms.blockworks.co/blockchain-etfs-gaining-steam/" target="_blank" rel="noreferrer noopener">told Blockworks that month</a> the company offers third-party mutual funds and ETFs with crypto ties through its brokerage platform and was “evaluating how and when we could offer our clients additional opportunities for exposure to cryptocurrencies.”



The Schwab filing follows BlackRock’s, the world’s largest asset manager, <a href="https://cms.blockworks.co/blackrock-files-for-crypto-etf/" target="_blank" rel="noreferrer noopener">filing to launch</a> an ETF focused on blockchain technology in January. Fidelity Investments <a href="https://cms.blockworks.co/fidelity-plots-crypto-etfs/" target="_blank" rel="noreferrer noopener">revealed plans a week later</a> to bring to market ETFs that would invest in companies involved in the metaverse and crypto more broadly.



The bank’s asset management arm oversaw roughly $380 billion of assets within index mutual funds and ETFs, as of Sept. 30, the most recent data available.



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Charles Schwab Latest ETF Heavyweight To Propose Crypto Fund

Sebastian Sinclair

<div id="highlights-block_61e8e8c8fe09d" class="highlights">
 <ul>
 <li>Charles Schwab&#8217;s CEO said crypto is &#8220;hard to ignore&#8221; and would welcome the opportunity to trade the asset if the &#8220;opportunity presents itself from a regulatory standpoint&#8221;</li>
 <li>The CEO also said there was a &#8220;tremendous void&#8221; in the crypto space for a firm like Schwab to fill</li>
 </ul>
 
</div>



In another sign of growing institutional interest in crypto, the CEO of financial services behemoth Charles Schwab gave a rare insight into how his firm is thinking about the nascent asset class.



During an <a href="https://www.bloomberg.com/news/articles/2022-01-19/schwab-ceo-sees-brokerage-of-the-future-looking-more-like-uber" target="_blank" rel="noreferrer noopener">interview with Bloomberg</a> on Wednesday, Walt Bettinger said cryptocurrencies are &#8220;hard to ignore&#8221; and that in today&#8217;s world they are &#8220;fairly significant.&#8221;



&#8220;We have a lot of ways that clients today can invest in crypto. What we don’t offer is direct trading. We would welcome the chance if the opportunity presents itself from a regulatory standpoint,&#8221; said Bettinger amid a raft of questions ranging from the Covid-19 pandemic to remote working.



Regulation in the US has made significant headway in recent years. Yet a patchwork of regulatory measures and guidance still looms, giving pause to some of the world&#8217;s largest financial firms to enter into the space. Meanwhile, US President Joe Biden looks poised to <a href="https://cms.blockworks.co/bidens-bank-regulator-pick-is-critic-of-big-banks-and-crypto/" target="_blank" rel="noreferrer noopener">increase oversight</a> on Wall Street and crypto activity in what could create a clearer runway for the bigger players.



Charles Schwab is one of the world&#8217;s largest financial services firms with assets under management of over $7.5 trillion and revenue of around $11.69 billion, according to a recent <a href="https://content.schwab.com/web/retail/public/about-schwab/SEC_Form10Q_09302020.pdf" target="_blank" rel="noreferrer noopener">Q3, 2020 quarterly report</a>. Its services range from banking and investing as well as wealth management advisory.



&#8220;There’s a tremendous void in that space today for a firm like Schwab,&#8221; said Bettinger before pointing out that crypto&#8217;s transaction costs in trading were &#8220;exceptionally high&#8221; as well as its spreads.



A spread refers to the difference between the bid price and asking prices of a security or asset.



Bettinger&#8217;s comments echo sentiments already acted upon by the world&#8217;s largest asset manager BlackRock, which leaped at the opportunity last year to take a stake in <a href="https://www.forbes.com/sites/anthonytellez/2021/08/19/blackrock-joins-fidelity-and-vanguard-as-a-bitcoin-mining-investor/?sh=7b1cd1762738" target="_blank" rel="noreferrer noopener">two bitcoin miners</a>, Marathon Digital Holdings and Riot Blockchain.



The move follows one by another large financial services firm, Fidelity Investments, which took stakes in the two miners.



BlackRock&#8217;s CEO Larry Fink said, in October, &#8220;<a href="https://cms.blockworks.co/blackrock-ceo-sees-huge-opportunities-in-digital-currency/" target="_blank" rel="noreferrer noopener">huge opportunities</a>&#8221; existed in crypto and bitcoin is &#8220;going to help consumers worldwide,&#8221; although he fell short of predicting where the asset class would sit in the long term.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.