Canada is set to launch multiple spot Solana exchange-traded funds with staking capabilities on Wednesday, marking another instance where Canadian regulators have moved ahead of their U.S. counterparts in approving cryptocurrency investment products. Bloomberg senior ETF analyst Eric Balchunas revealed the development in a social media post, citing an official circular from Toronto-Dominion Bank.
What to Know:
- Four Canadian asset managers—Purpose, Evolve, CI, and 3iQ—received regulatory approval to list the world's first spot Solana ETFs
- The products will hold physical Solana tokens and generate additional yield through staking activities
- While Canada moves forward with staking-enabled crypto ETFs, U.S. regulators recently delayed a decision on similar capabilities until June 2025
The Ontario Securities Commission has approved four asset managers to list the new products on the Toronto Stock Exchange. "The OSC today gave the go-ahead to ETF issuers, including Purpose, Evolve, CI, and 3iQ, to list the world's first spot Solana ETFs in Canada," stated the circular shared by Balchunas.
These Solana ETFs will differ from previous crypto funds by incorporating staking functionality, potentially offering higher yields than Ethereum staking while reducing overall holding costs.
Solana is currently trading at $129.97, down 2.2% over the last 24 hours, according to data from cryptocurrency tracking site CoinGecko. The approval comes despite this recent price dip, indicating growing institutional confidence in the long-term viability of the asset.
Global Push for Cryptocurrency ETF Products
The Canadian move represents part of a broader global acceleration in regulated crypto investment products. In January 2024, after years of rejections, the U.S. Securities and Exchange Commission approved the first batch of spot Bitcoin ETFs. This watershed moment triggered numerous filings for additional crypto-based ETFs in the United States.
The election of crypto-friendly President Donald Trump and subsequent changes in SEC leadership have further fueled optimism for expanded crypto ETF offerings in the U.S. market. Several American asset managers, including WisdomTree, Bitwise, 21Shares, Franklin Templeton, and Canary Capital, have submitted proposals for altcoin-based spot ETFs featuring tokens like XRP and Solana.
However, Balchunas noted that existing Solana-based products in the U.S. have struggled to attract significant assets. "The 2x XRP already has more AUM than both the Solana ETFs, and it came out after. Wouldn't read a ton into it, but it's our first look at the alt coin race," he wrote on social media platform X.
Interest in cryptocurrency ETFs extends beyond North America. Both Hong Kong and Australian markets have introduced regulated spot crypto ETFs, reflecting institutional investors' growing demand for compliant digital asset exposure.
Canada established its leadership position in this sector when it approved the first spot Bitcoin ETF in February 2021, significantly earlier than its U.S. counterpart.
Staking functionality has emerged as a particularly contentious feature in newer cryptocurrency ETFs. While Canadian regulators have embraced staking capabilities, U.S. authorities remain cautious. On Monday, the SEC extended its review period for Grayscale's proposal to include staking in its spot Ethereum ETF until June 1, 2025.
The U.S. regulatory body has yet to approve staking in any ETF product. Bloomberg analyst James Seyffart projects that U.S.-listed ETFs could potentially gain permission to engage in staking by late 2025, depending on regulatory developments and market conditions.
The Canadian Solana ETFs will invest in long-term holdings of the cryptocurrency in physical form but will track different indices, according to the Toronto-Dominion Bank circular. This structure allows investors to gain exposure to the underlying asset while benefiting from potential staking rewards.
For institutional investors seeking regulated exposure to cryptocurrencies beyond Bitcoin and Ethereum, these new Canadian products offer an alternative pathway. The staking component potentially addresses one common criticism of crypto ETFs—that they lack the yield-generating capabilities available to direct token holders.
Final Thoughts
Canada's approval of staking-enabled Solana ETFs represents another example of the country's progressive approach to cryptocurrency investment products. While U.S. regulators continue deliberating on similar proposals, Canadian investors will gain first access to these innovative financial instruments that combine traditional ETF structures with native cryptocurrency functionality.