One River has applied for a carbon-neutral bitcoin ETF that uses carbon credits to offset the pollution from mining the blockchain.
One River, a digital asset management company, has applied for a carbon-neutral bitcoin ETF. The S-1 filing, filed on May 24, proposes buying and selling carbon credits to offset bitcoin’s carbon emissions.
The firm will not, however, have direct exposure to bitcoin. Instead, it will work with third parties to sell and redeem shares in order to provide the asset.
Bitcoin that is carbon-neutral
One River partners with Moss Earth, an Uruguayan company, to purchase blockchain tokens that demonstrate its carbon emissions reduction. These carbon credits are listed on Verra’s registry. Coinbase would also serve as the custodian for the bitcoin properties.
Former SEC Chairman Jay Clayton serves as an advisor to the company, which may be a plus in this filing. Clayton’s understanding of legislation and familiarity with the cryptocurrency industry may be the deciding factor in approval.
The filing comes as bitcoin’s energy use has become a major source of contention in the industry. Tesla’s recent decision to stop accepting bitcoin payments due to its high power consumption fueled this trend.
Regulations are being cautiously considered in the United States
After many filings over the last year, the Securities and Exchange Commission (SEC) has yet to authorize a bitcoin ETF. Officials at the Securities and Exchange Commission have been wary of authorizing an ETF, allegedly due to investor rights and market manipulation concerns.
Via listing on a stock exchange, a bitcoin ETF will provide investors with direct exposure to cryptocurrencies. While this will be a big move forward for the industry, the market’s volatility could be too much for an average retail investor with little experience.
While the SEC recently postponed a decision on a VanEck ETF by 45 days, the outlook remains bleak. Several recent remarks by officials, including those by the newly appointed Acting Comptroller of the OCC, imply that market limits could be imposed.
In general, the United States seems to be taking its time to place a robust regulatory system for the industry. It’s unclear whether it’ll be stringent or lenient. These officials have confirmed that investor security is a key factor in deciding regulation in whatever public statements are available.