Token Market update: Canada to Launch Solana ETFs With Built-In Staking

Canada has made history in the cryptocurrency investment sector by being the first country to make spot Solana exchange-traded funds (ETFs) with staking rewards legal. The Ontario Securities Commission (OSC) approval marks a significant move in the crypto industry. These ETFs, which are set to start trading on April 16, 2025, will be launched by the leading asset management companies such as Purpose Investments, Evolve ETFs, 3iQ, and CI Global Asset Management.

A New Phase in Crypto-ETF Evolution

According to Bloomberg analyst Eric Balchunas, Canada is preparing to introduce its first spot Solana exchange-traded funds (ETFs) on April 16. In an April 14 X post, Balchunas posted a client memo from TD Bank saying that the Ontario Securities Commission (OSC) has cleared several asset management firms — Purpose, Evolve, CI, and 3iQ — to develop ETFs that will directly hold Solana (SOL), which is presently trading at $131.54. 

Purpose Investments, CI Global Asset Management, Evolve ETFs, and 3iQ are among the few licensed fund issuers. It is also expected that TD Bank, a Canadian financial institution, will offer back-end services for handling reward distribution and staking data management. The rising cooperation between the crypto ecosystem and traditional financial players is reflected in this collaboration. These ETFs will hold physical SOL tokens and aim to offer direct exposure to the price of Solana while enabling the funds to stake some portion of their assets for higher yield.

Canada is closing the gap between traditional capital markets and decentralized finance (DeFi) by combining the regulated ETF framework with staking, or locking up cryptocurrency holdings to support blockchain operations. This approach can transform the way digital assets are brought to institutional and individual investors globally.

How Staking Works in ETFs

The incorporation of staking in ETFs is a first-of-its-kind feature. According to the memo provided by Balchunas, the ETFs will stake in Solana to generate more income. The aim is to enhance overall investor returns while also paying some of the fund’s management costs and operating expenses. 

Additionally, Solana’s staking approach can be more generous with payouts compared to Ethereum-based vehicles because its network rewards are more generous. The idea is to share these proceeds with investors in a way that essentially halves the long-term price of holding the ETF.

Staking about these ETFs means investing a subset of SOL holdings into helping authenticate transactions on the Solana blockchain in return for rewards. Staking Solana not only supports the operations of the network, but it also provides other incentives to investors. These incentives can increase returns overall, which would make ETFs more desirable for potential investors.

Market Implications and Outlook

Large institutions and individual investors alike are expected to closely monitor the upcoming launch of these ETFs.  Because the launch date of April 16 is approaching, there could be SOL price volatility as soon as April 15. 

Staking rewards, designed to enhance investor yield and solidify Canada’s position as a cryptocurrency innovation leader, are a significant aspect of these ETFs. Its price can increase with more interest due to this advance because of the rising interest in SOL following this news.

Moreover, Canada’s proactive approach can convince other countries’ regulatory agencies to adopt similar methods, especially with the United States Securities and Exchange Commission still debating whether to approve bitcoin ETFs with staking features.