In an interesting development in the realm of cryptocurrency, Frankin Templeton, known as one of the globally leading asset management companies, put forward a proposal to the US Securities and Exchange Commission (SEC). The proposal aimed to establish a spot Solana ETF (exchange-traded fund), marking the firm’s foray into the Solana market, thereby joining a slew of other contenders ready to offer SOL-based financial solutions to the American investors.
Franklin Templeton’s step towards a Spot Solana ETF
The asset management heavyweight, on February 21, dropped an application for an exchange-traded product that would essentially shadow the spot valuation of the fifth highest cryptocurrency, Solana. The proposed Solana ETF of the Franklin Templeton group is set to be listed on the Cboe BZX Exchange, appointing the Coinbase Custody Trust Company, LLC as the custodian.
The application reads as follows: The proposed Franklin Solana Trust (“Trust”) is organized under the Delaware statutory trust. The Franklin Solana ETF series of the Trust (the “Fund”) proposes shares (“Shares”), representing fractional undivided beneficial interests in its net assets. The Fund’s assets primarily consist of Solana held by a custodian for the Fund. The Fund seeks to reflect the performance of the Solana price and strives for such representation before paying the Fund’s expenses.
Franklin Templeton, in its submission to the SEC, mentioned plans to occasionally stake a segment of the ETF’s assets through one or multiple trusted staking providers. The “Fund,” according to the company, will receive Solana tokens as a reward for participating in staking activities, treating the tokens as income.
Growing crypto products from Franklin Templeton
If approved, this spot Solana ETF will be added to the list of crypto products in the United States that Franklin Templeton offers, which already includes Bitcoin and Ethereum exchange-traded funds. The asset management firm just recently launched an ETF that combines ETH and BTC after it got SEC’s green light in December 2024.
The bid to offer a staking option within the Solana ETF isn’t a radical venture, as the concept has been mulled over in other crypto products by several issuers. For instance, the New York Stock Exchange considered staking for Grayscale’s Ethereum ETFs, and Cboe BZX Exchange is considering staking for 21Shares’ Ethereum fund.
Given the regulatory landscape for digital assets in the United States is gradually improving, it’s becoming commonplace for traditional firms to explore opportunities in new crypto-centric financial products. The growing clarity in the US crypto sector is further emphasized by the SEC’s recent decision to drop its case against Coinbase.
Current Solana Price
The price of SOL did not react significantly to Franklin Templeton’s announcement of the Solana ETF. At the time of writing, SOL’s price stands at approximately $170, marking a 2% reduction over the past 24 hours.
FAQs
Q: What is a Solana ETF?
A: A Solana ETF (Exchange Traded Fund) is a type of investment fund and exchange-traded product that is designed to track the performance of the Solana cryptocurrency.
Q: What is the role of staking in an ETF?
A: Staking in an ETF allows the “Fund” to receive crypto tokens as rewards for participation in staking activities. These tokens are then treated as income for the fund.
Q: Why is Franklin Templeton seeking to launch a Solana ETF?
A: Given the evolving digital asset regulatory landscape in the US, traditional firms like Franklin Templeton are exploring opportunities within the dynamic world of cryptocurrency. By launching a Solana ETF, they aim to provide investors with a novel way to gain exposure to this emerging asset class.
Q: How has the price of Solana reacted to this development?
A: As per recent observations, the price of Solana has shown minimal reaction to the proposed spot Solana ETF by Franklin Templeton. The SOL pricing is currently at around $170, marking a slight decrease of 2% over the past day.
