TLDR
- Vanguard has changed its stance and will now allow clients to trade third-party crypto-focused ETFs and mutual funds.
- The shift applies to Vanguard’s US brokerage platform, offering access to cryptocurrencies like Bitcoin, Ether, XRP, and Solana.
- Vanguard’s decision comes after years of resistance, with the firm now treating crypto funds similarly to other non-core assets like gold.
- Despite the change, Vanguard has no plans to launch its own crypto products and will exclude highly speculative assets like memecoins.
- Vanguard continues to emphasize regulatory compliance, listing only crypto funds that meet necessary standards.
Vanguard, the world’s second-largest asset manager, is changing its stance on cryptocurrency investments. The company will now allow clients to trade third-party crypto-focused ETFs and mutual funds. This marks a shift from its previous skepticism regarding digital assets. Starting Tuesday, Vanguard’s US brokerage platform will open to funds holding cryptocurrencies like Bitcoin, Ether, XRP, and Solana, as long as they meet regulatory requirements.
Vanguard’s Shift Toward Crypto-Linked Funds
Vanguard’s move to embrace crypto-focused ETFs and mutual funds is a significant change. The company has long been resistant to digital assets due to concerns about volatility and speculation. However, the growing demand for crypto exposure from investors has prompted a change in direction. Vanguard will now treat crypto funds the same as other non-core assets like gold, offering clients access to crypto investments through their brokerage accounts.
Andrew Kadjeski, head of brokerage and investments at Vanguard, commented on the shift.
“Cryptocurrency ETFs and mutual funds have been tested through periods of market volatility, performing as designed while maintaining liquidity,” he said. “Investor preferences continue to evolve, and the administrative processes to service these funds have matured.”
Despite this shift, Vanguard remains cautious about directly issuing crypto products. The firm still refuses to launch its own crypto-related ETFs or mutual funds. Instead, it will list third-party crypto funds that meet regulatory standards. Vanguard will exclude products related to memecoins and other highly speculative assets.
“We aim to provide a brokerage trading platform that gives our brokerage clients the ability to invest in products they choose,” said Kadjeski.
Vanguard’s focus remains on ensuring that investors understand the risks associated with crypto exposure. While the firm’s position on digital assets has softened, it continues to emphasize the speculative nature of these investments.
Vanguard’s Focus on Regulatory Compliance
Vanguard’s decision reflects its commitment to regulatory compliance in crypto investments. The company will list only those third-party funds that meet all necessary regulatory standards. This includes funds primarily holding Bitcoin, Ether, XRP, and Solana, among other cryptocurrencies. Vanguard’s new stance allows clients to trade these crypto funds through their existing brokerage accounts.
Despite embracing crypto-linked funds, Vanguard has made it clear it does not plan to create its own crypto products. The firm’s decision aligns with its broader strategy to offer a wide range of investment options while prioritizing investor education and risk awareness.
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