Rob Marrocco, Cboe Vice President and Global Head of ETF Listings, expressed doubts about the near-term feasibility of launching Solana (SOL) and XRP spot ETFs, citing the absence of a futures market and regulatory clarity as primary obstacles. Speaking on the ETF Store podcast on June 11, Marrocco emphasized that market expectations for these ETFs are unrealistic without significant changes in the current landscape.

Marrocco pointed out that the approval of spot Bitcoin and Ethereum ETFs hinged on the existence of corresponding futures markets. Since Solana and XRP do not have established futures markets, the regulatory framework necessary for approving spot ETFs for these cryptocurrencies is lacking. He suggested that the only practical path to a Solana ETF would be the creation of a Solana futures ETF first, which would need to trade successfully over a significant period to establish the required track record for regulatory approval. This process, Marrocco noted, could be exceedingly long, emphasizing that it might "take forever to get to that point."

A more expedient approach, according to Marrocco, would be the establishment of a comprehensive crypto regulatory framework. Such a framework would clearly delineate what constitutes a security versus a commodity, providing the SEC with the necessary guidelines to move forward. However, this approach would require legislative action, which can be time-consuming and contingent on political will and cooperation, particularly challenging in an election year.

Despite the hurdles, Marrocco suggested that achieving regulatory clarity through legislation could be quicker than waiting for a futures market to develop for Solana. He emphasized the need for a clearer regulatory framework to provide the necessary transparency and confidence for launching new crypto ETFs. VettaFi editor-in-chief Lara Crigger concurred with Marrocco's assessment, noting that the absence of a futures market for Solana means there is less data for the SEC to evaluate the market's size and transparency, which are crucial for ETF approval.

The industry remains divided on the potential for Solana ETFs. While JP Morgan and Bloomberg have expressed skepticism, Bernstein sees the approval of Ethereum ETFs as a potential precedent for similar tokens like Solana to gain commodity classification. The ongoing regulatory uncertainty in the US is starting to subside as crypto becomes a more prominent issue for American voters.

In an effort to address these challenges, Congress recently passed the "Financial Innovation and Technology for the 21st Century Act" (FIT21) on May 22. This legislative bill aims to create a comprehensive regulatory framework for digital assets, ensuring investor protection and market integrity. FIT21, which passed with strong bipartisan support in the House, outlines clear regulatory responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Under the act, the CFTC would oversee digital commodities, while the SEC would manage digital assets offered as part of an investment contract. This clear delineation is intended to reduce regulatory overlap and provide more straightforward guidelines for market participants. The bill, however, is still pending a Senate vote before it can become law.

Marrocco's comments underscore the complexities and challenges facing the approval of new crypto ETFs beyond Bitcoin and Ethereum. While establishing a futures market for cryptocurrencies like Solana could pave the way for future ETFs, the process is likely to be lengthy. Alternatively, the creation of a comprehensive regulatory framework through legislative action might offer a quicker path, though it too faces significant hurdles. As the industry navigates these challenges, the future of Solana ETFs remains uncertain but continues to be a topic of keen interest and debate.