Key Takeaways from Franklin Templeton’s Solana ETF Filing

Franklin Templeton, managing $1.53 trillion in assets, filed an application with the U.S. Securities and Exchange Commission (SEC) on March 12 to launch the Franklin Solana ETF. This exchange-traded fund (ETF) aims to track the price of Solana (SOL), one of the most prominent cryptocurrencies today. 

This application comes amid growing interest in Solana, which has seen a surge in popularity due to its high-speed blockchain and the widespread use of decentralized applications (dApps) built on it. 

A Regulated Path for Solana Exposure

The proposed Franklin Solana ETF would trade on the Cboe BZX Exchange, a well-established exchange known for its focus on traditional and digital assets. Solana (SOL) would be held directly by the ETF, which provides exposure to the cryptocurrency's price fluctuations. The Coinbase Custody Trust Company, LLC would serve as the custodian for the digital assets, ensuring the safekeeping of the Solana tokens.

The ETF would not be registered under the Investment Company Act of 1940, nor would it operate as a commodity pool under the Commodity Exchange Act. This regulatory approach reflects Franklin Templeton’s belief that the Solana market is resistant to manipulation, citing the cryptocurrency’s decentralized nature and the 24/7 trading environment that allows for continuous arbitrage across various platforms.

The filing comes at a time when institutional investors have shown increasing interest in Solana. Franklin Templeton notes that U.S. exposure to Solana has already reached billions of dollars, primarily through over-the-counter (OTC) funds and digital asset trading platforms. The ETF would utilize the CME CF Solana-Dollar Reference Rate – New York Variant as its benchmark index, aggregating data from major Solana trading platforms such as Coinbase, Kraken, and Gemini.

Transparency and Investor Protection

One of the key selling points of the Franklin Solana ETF is its transparency. The fund’s net asset value (NAV) will be calculated daily, providing investors with a clear picture of the fund’s performance. Moreover, intraday indicative values will be disseminated every 15 seconds during trading hours, enabling investors to make informed decisions throughout the trading day.

Franklin Templeton’s filing emphasizes that the ETF would offer U.S. investors a regulated and transparent method for gaining exposure to Solana, reducing the risks typically associated with the direct custody of digital assets. This is particularly appealing for those who have been hesitant to invest in cryptocurrencies due to security concerns or a lack of understanding about how to manage crypto holdings.

The Growing ETF Landscape

The submission of Franklin Templeton’s filing follows a broader trend in the financial world: the increasing number of ETF filings tied to cryptocurrencies. In recent months, there has been a flurry of activity in the crypto ETF space, as financial giants like Grayscale Investments, VanEck, and 21Shares have also filed for ETFs that would track various digital assets, including XRP, Litecoin, and Dogecoin.

While the SEC has previously approved ETFs based on Bitcoin and Ether, the approval of Solana ETFs remains a topic of ongoing debate. Despite the SEC’s historical resistance to approving altcoin-based ETFs, many analysts are optimistic about the likelihood of approval, especially given the SEC’s recent focus on streamlining the approval process for crypto ETFs.

Regulatory Challenges and Delays

On March 11, 2025, the SEC announced that it would delay decisions on several altcoin-based ETFs, including those for Solana, Litecoin, Dogecoin, and XRP. The regulator cited the need for additional time to evaluate rule changes approving these proposals. This delay has become a standard part of the regulatory process, with some analysts suggesting that it does not negatively affect the chances of approval for these funds.

Bloomberg’s ETF analyst James Seyffart believes that the SEC’s extended deliberation period is a normal part of the approval process and that the Solana ETF application has a high likelihood of being approved. The SEC has up to 240 days to make its decision on the proposed Franklin Solana ETF, with the final approval deadline set for October 2025.

The Push for Crypto Integration

The proposal for a Solana ETF comes on the heels of other significant cryptocurrency-based filings. Franklin Templeton has also filed for an XRP ETF, indicating a broader strategy of introducing products that cater to growing demand for altcoins. The success of spot Bitcoin ETFs, which have garnered close to $100 billion in assets since their approval 14 months ago, has played a significant role in encouraging institutional players to develop similar products for other cryptocurrencies.

Spot Ethereum funds, while generating less interest than their Bitcoin counterparts, have still attracted nearly $2.5 billion in net inflows since their inception. This success is likely a driving factor behind the rising number of altcoin ETF proposals, including Solana-based funds.

Franklin Templeton’s CEO, Jenny Johnson, has expressed confidence in the future of crypto integration within traditional financial systems. She believes that the current U.S. administration, under President Trump, will continue its pro-crypto stance and foster greater integration between traditional financial markets and the digital asset space.

With 200 million active Solana users worldwide, the integration of Solana into mainstream financial products makes it easier for the average investor to access this innovative cryptocurrency without the complexities of managing wallets or exchanges. The ETF structure provides a familiar investment product that is more accessible and easier to trade than directly buying Solana.