Dave Weisberger: Redeeming with cash essentially shifts the burden of Bitcoin trading from professional trading companies to authorized APs like Morgan Stanley

Dave Weisberger, co-CEO of CoinRoutes, stated that the U.S. Securities and Exchange Commission's requirement for cash redemptions essentially shifts the burden of Bitcoin trading from professional trading firms to authorized participants (APs) such as Morgan Stanley and Goldman Sachs. This means competition among issuers will decrease, with performance based on which issuer has better resources and trading strategies. The SEC insists on physical cash redemptions because it currently does not allow brokers like Robinhood and Fidelity to directly trade spot Bitcoin. It is still unclear why the agency continues to prevent brokerages from trading spot Bitcoin, but Weisberger believes it has a lot to do with political tensions around digital assets in Congress. One explanation given by those who have met with the SEC is that the commission fears Bitcoin could be used for money laundering, market manipulation, and other illegal purposes.