Regulation
Cboe executive says Solana ETFs are unlikely without futures market or regulatory clarity
Cboe Vice President and Global Head of ETF Listings Rob Marrocco believes cryptocurrency ETFs beyond Bitcoin and Ethereum are unlikely until the market and regulatory landscape changes.
Marrocco said during a podcast on ETF Store on June 11th that Solana’s market expectations (SOL) AND XRP Spot ETFs are not realistic in the short term as these cryptocurrencies do not have a futures market, which was a primary factor in the approval of Bitcoin and Ethereum spot ETFs.
He added that this implies that the only feasible way to bring a Solana ETF to market would first be through a Solana futures ETF, which would then pave the way for a spot ETF.
Morocco also said that even if Solana futures ETFs were introduced, they would need to be traded for a significant period to establish a track record. However, this process may be prolonged and may take a long time to reach fruition.
He highlighted the length of the process, saying “it can take forever to get to that point.”
Alternative route
According to Marrocco, a more appropriate approach would be to establish a comprehensive regulatory framework on cryptocurrencies. This framework would outline what constitutes a security versus a commodity, allowing the SEC to proceed accordingly.
However, this would require legislative action, which could take as long or longer depending on the speed and will of politicians.
Despite the challenges, especially in an election season, Marrocco suggested that having a clear regulatory framework would be a quicker path than waiting for a futures market to develop.
VettaFi editor-in-chief Lara Crigger largely agrees, saying:
“Solana does not have a futures market. There is less data that the SEC is specifically looking for to demonstrate that the market is large and transparent enough to support an ETF.”
Industry experts are divided on the issue of Solana ETFs, with JP Morgan AND Bloomberg expressing doubts, while Bernstein believes the Ethereum ETF approval has paved the way for similar tokens like Solana to gain a commodity classification.
FIT21
Regulatory uncertainty in the United States is starting to ease as cryptocurrencies become an increasingly important issue for American voters this election year.
Congress recently passed a new legislative bill on May 22 titled “The Financial Innovation and Technology for the 21st Century Act (FIT21).” The bill aims to create a comprehensive regulatory framework for digital assets in a bid to ensure investor protection and market integrity.
FIT21, passed with strong bipartisan support in the House, establishes clear regulatory responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Under the law, the CFTC will be given jurisdiction over digital commodities, while the SEC will oversee digital assets offered as part of an investment contract. This delineation is critical to reduce regulatory overlap and provide clearer guidelines for market participants.
The bill has yet to become law and is currently awaiting a Senate vote.