Regulatory Landscape Shifts as Memecoins Enter ETF Discussions

Date: March 17, 2025, 3:54 p.m. UTC

In a surprising twist for the cryptocurrency market, limiting access to the blockchain that launched former President Donald Trump’s memecoin could be akin to shutting out investors from early offerings of tech giants like Amazon and Google, according to Hadley Stern, Chief Compliance Officer at Marinade Labs. As the U.S. braces for a new wave of digital asset regulation, the emergence of memecoins in the cryptocurrency exchange-traded fund (ETF) conversation marks a significant shift in the American financial landscape.

A New Era for Digital Assets

With the anticipated regulatory environment signaling what Stern describes as “open season” for digital assets, the crypto market is seeing a surge of new proposals, particularly focused on the use of memecoins as valid assets within ETFs. This shift comes on the heels of the release of a Solana-based memecoin coinciding with the new president’s inauguration. Stern emphasizes the curious nature of this transition, as the complexities of the digital asset market evolve from facing strict regulations to embracing what he calls “absurdity.”

Memecoins: Beyond Just Laughs

While the thought of finance professionals advising investors on their allocations to coins like $TRUMP may sound ludicrous, Stern argues that these new currencies may hold potential value as investable assets within ETFs. He points out that coins such as $BONK and $PENGU exhibit elements of cultural significance, attracting a niche but active investor demographic. This scenario opens the door to the possibility of these assets being included in broader ETFs, thus drawing both retail and institutional investors.

The Case for Solana ETFs

As a blockchain, Solana has rapidly ascended the rankings, now positioned as the third-largest asset by market capitalization and boasting significant network usage. In contrast to Bitcoin, which is increasingly regarded as a store of value, Solana has distinguished itself as a formidable player in enabling smart contract execution thanks to its innovative Proof of History mechanism.

Given this development, Stern makes a compelling case for the establishment of a dedicated Solana ETF. He notes that while it took a decade for Bitcoin’s and Ethereum’s ETF approvals, the time for Solana to receive similar recognition is overdue.

Investor Disadvantages and European Precedents

Stern highlights a notable disparity between U.S. and European investors regarding access to staking rewards. Although U.S. investors are currently unable to benefit from staking rewards through ETFs, European markets have adopted exchange-traded products (ETPs) that permit such participation. This discrepancy puts American investors at a disadvantage and highlights the urgent need for progress in the regulatory framework governing digital assets.

Despite the reluctance from the U.S. Securities and Exchange Commission (SEC) to approve a Solana ETF, Stern argues that the landscape is shifting. He calls on the SEC to expedite review processes for pending applications from firms like Grayscale, VanEck, and others, while also advocating for the reintroduction of staking in ETFs—a standard already established in Europe.

Looking Ahead

As we navigate through this pivotal moment in the cryptocurrency sphere, the actions taken by the incoming administration and the SEC could lead to a transformative framework for crypto-asset products in the U.S. If successful, this initiative would not only broaden access for investors but could also pave the way for more diversified portfolios in the fast-evolving digital asset landscape.

Conclusion

The recent developments surrounding memecoins and their potential inclusion in traditional financial products underscore an exciting yet complex evolution for digital assets in the United States. With industry experts like Hadley Stern advocating for innovative regulatory approaches, the future may hold significant opportunities for both retail and institutional investors alike.

Note: The views expressed in this article are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.