Regulation
Cboe head says Solana ETFs unlikely without futures market or regulatory clarity
Cboe Vice President and Global Head of ETF Listings Rob Marrocco believes crypto ETFs other than Bitcoin and Ethereum are unlikely until the market and regulatory landscape changes.
Marrocco said during an ETF Store podcast on June 11 that the market’s expectations regarding a Solana (GROUND) And XRP Spot ETFs are unrealistic in the short term because 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 possible way to market a Solana ETF would be through a Solana futures ETF first, which would then pave the way for a spot ETF.
Morocco further said that even if Solana futures ETFs were introduced, they would need to be traded for a significant period of time to establish a track record. However, this process could be prolonged and take considerable time to complete.
He highlighted the length of the process, saying it can “take forever to get to this point.”
Alternative route
According to Marrocco, a quicker approach would be to establish a comprehensive crypto regulatory framework. This framework would delineate what constitutes a security versus a commodity, allowing the SEC to proceed accordingly.
However, this would require legislative action, which could take just as long or longer, depending on the speed and willingness of policymakers.
Despite the challenges, particularly around election time, Marrocco suggested that having a clear regulatory framework would be a faster route than waiting for a futures market to develop.
Lara Crigger, editor-in-chief of VettaFi, largely agrees, saying:
“Solana does not have a futures market. There is less data that the SEC is looking for specifically to show that the market is large enough and transparent enough to support an ETF.
Industry experts are divided on the issue of Solana ETFs, with J.P. Morgan And Bloomberg expressing doubts, while Bernstein believes the approval of the Ethereum ETF has paved the way for similar tokens like Solana to achieve commodity classification.
FIT21
Regulatory uncertainty in the United States is beginning to ease as crypto becomes an increasingly important issue for American voters during an election year.
Congress recently passed a new bill on May 22, titled “Financial Innovation and Technology for the 21st Century (FIT21) Act.” The bill aims to create a comprehensive regulatory framework for digital assets with the aim of ensuring investor protection and market integrity.
FIT21, which 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 have jurisdiction over digital products, while the SEC will oversee digital assets offered under an investment contract. This delineation is crucial to reduce regulatory overlap and provide clearer guidelines to market participants.
The bill has not yet become law and is currently awaiting a vote in the Senate.