The possibility of an XRP exchange-traded fund (ETF) has been a topic of intense debate within the cryptocurrency industry. While some, like Ripple CEO Brad Garlinghouse, believe an XRP ETF will be launched by 2025, industry experts caution that significant hurdles need to be cleared before such a product can become a reality.
According to Nate Geraci, president of The ETF Store, an XRP ETF has to replicate the approval process followed by Bitcoin and Ethereum ETFs. These cryptocurrencies first had futures contracts listed on a venue regulated by the Commodity Futures Trading Commission (CFTC), such as the Chicago Mercantile Exchange (CME).
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Geraci emphasizes that the U.S. Securities and Exchange Commission (SEC) would then require a period of established trading history for an XRP futures ETF before approving a spot ETF for the cryptocurrency.
In simpler terms, an XRP futures ETF must precede a spot ETF. This two-step approach signifies a potentially multi-year process, reducing the chances of an XRP ETF in 2025 or earlier. This development, in turn, will push back the massive bullish expectations many analysts hold due to an ETF launch.
An Alternative Path
While the current scenario suggests a lengthy wait for an XRP ETF, some experts propose alternative routes. Geraci says that a clear and comprehensive regulatory framework established by the U.S. Congress could expedite the process.
This framework would ideally distinguish between cryptocurrencies classified as securities and those considered commodities. Additionally, it would assign clear oversight responsibilities to the relevant regulatory bodies. With such a framework in place, Geraci acknowledges the possibility of a faster track to market for various crypto ETFs, including XRP.
However, Geraci remains doubtful about the feasibility of such legislation. The election also makes such a regulation less likely, as cryptocurrencies are becoming a more prominent topic in U.S. politics. The complex nature of cryptocurrency regulation and the political landscape makes swift congressional action unlikely.
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Amid this uncertainty, many crypto users are looking toward Donald Trump as a potential savior for the crypto market in the U.S. Trump is accepting cryptocurrency donations, and has been an outspoken supporter of cryptocurrencies and blockchain technology.
With Trump in the White House, the chances of proper legislation for cryptocurrencies will rise, and the crypto market will finally have the opportunity to operate without unnecessary fear of a lawsuit from the SEC.
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