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Cboe executive says Solana ETFs are unlikely without a futures market or clear regulatory guidance.



Cboe Vice President and Global Head of ETF Listings Rob Marrocco recently discussed the possibility of crypto ETFs beyond Bitcoin and Ethereum in a podcast. He believes that until the market and regulatory landscape changes, it is unlikely that ETFs for cryptocurrencies such as Solana (SOL) and XRP will be approved in the short term. Marrocco emphasized that the approval of spot Bitcoin and Ethereum ETFs was largely due to the presence of a futures market, which is lacking for other cryptocurrencies.

Marrocco suggested that the most viable way to bring a Solana ETF to market would be through a Solana futures ETF first, which would then pave the way for a spot ETF. However, he highlighted that even the introduction of Solana futures ETFs would require a significant amount of time to establish a track record before a spot ETF could be considered. He stressed that the process could be lengthy and may take “forever” to reach fruition.

An alternative pathway suggested by Marrocco is the establishment of a comprehensive crypto regulatory framework. This framework would clarify what constitutes a security versus a commodity, allowing the SEC to proceed accordingly. However, this approach would require legislative action, which could also be time-consuming depending on the speed and willingness of politicians. Despite the challenges, Marrocco believes that having a clear regulatory framework would be a quicker path compared to waiting for a futures market to develop.

Industry experts have differing opinions on the possibility of Solana ETFs. Some, such as JP Morgan and Bloomberg, express doubt, while Bernstein believes that the approval of Ethereum ETFs has paved the way for similar tokens like Solana to receive a commodity classification. This indicates that there are varying perspectives on the potential approval of ETFs for cryptocurrencies beyond Bitcoin and Ethereum.

Recently, the US passed a new legislative bill called “The Financial Innovation and Technology for the 21st Century Act (FIT21)” on May 22. This bill aims to create a regulatory framework for digital assets by establishing clear responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Under FIT21, the CFTC will have jurisdiction over digital commodities, while the SEC will oversee digital assets offered as part of an investment contract. This delineation is important for reducing regulatory overlap and providing clearer guidelines for market participants.

Overall, the approval of crypto ETFs beyond Bitcoin and Ethereum is currently dependent on various factors, including the presence of a futures market and the establishment of a comprehensive regulatory framework. While there are challenges and differing opinions within the industry, the recent passage of FIT21 in the US indicates that progress is being made towards creating a regulatory framework for digital assets. As the market and regulatory landscape continue to evolve, it remains to be seen when ETFs for cryptocurrencies like Solana and XRP will be approved.

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