Former U.S. Securities and Exchange Commission Chairman Jay Clayton broke down the SEC's decision regarding spot Ethereum exchange-traded funds (ETFs) and what the next steps are.

Clayton noted that the approved listings bode favorably for the product, adding that he thinks their trading will be "inevitable." But there are still thorny questions surrounding the product.

The former SEC chairman first noted that Ethereum ETF approval comes in two steps.

"There’s the listing approval, which is what happened yesterday, and then there’s the approval of the product itself, which is still pending," Clayton said Friday in an interview with CNBC.

What comes next before trading begins is whether the funds' registration statements are approved. A registration statement provides transparency …