The pathway for a spot XRP exchange-traded fund (ETF) in the United States faces extended scrutiny, as regulators have pushed back the decision timeline for a prominent proposal. Franklin Templeton, a major asset manager, will now have to wait significantly longer for a verdict on its application to list such a product.
SEC Extends Review Period for XRP ETF
The U.S. Securities and Exchange Commission (SEC) has officially postponed its decision regarding Franklin Templeton’s proposed spot XRP ETF. The new deadline is now set for June 17, 2025. While delays can sometimes cause unease among investors, market analysts suggest this development aligns with established regulatory processes.
Absence of Futures Market Cited as Key Factor
A primary hurdle identified for the XRP ETF is the current lack of regulated XRP futures contracts trading on the Chicago Mercantile Exchange (CME). The SEC has historically demonstrated a preference for the existence of a robust futures market before greenlighting spot crypto ETFs. This pattern was observed with both Bitcoin and Ethereum ETFs.
The rationale is that an active futures market provides essential pricing data and mechanisms for regulatory oversight, offering a reliable benchmark for the underlying spot market. Without CME-listed XRP futures, the SEC appears hesitant to proceed with the spot ETF approval.
Wider Context of Crypto ETF Delays
This postponement is not an isolated incident affecting only XRP. The SEC is concurrently delaying decisions on various other cryptocurrency-related ETF filings. These include products linked to Ethereum staking activities and even Dogecoin. According to James Seyffart, an ETF analyst at Bloomberg, further delays are anticipated for applications involving assets like Solana (SOL) and Hedera Hashgraph (HBAR).
Most final deadlines for these diverse crypto ETF applications extend well into late 2025, indicating a cautious and methodical approach by the regulator across the digital asset space.
Potential Link to Ripple Legal Case?
An intriguing theory circulating within the crypto community links the ETF delay to the ongoing legal battle between the SEC and Ripple Labs. Speculation suggests that if a potential settlement involves Ripple making payments using XRP tokens rather than fiat currency, the SEC might strategically delay the ETF approval.
The reasoning is that an approved spot XRP ETF would likely exert upward pressure on XRP’s market price. If a settlement amount is denominated in XRP, a higher token price would alter the settlement’s overall value. The SEC might prefer to finalize the legal resolution before introducing a product that could significantly impact the asset’s valuation during sensitive negotiations.
Currently, the SEC vs. Ripple lawsuit is temporarily paused (in abeyance) as both parties explore settlement possibilities. The deadline for reaching a resolution in this negotiation phase is reportedly June 10, 2025, just one week prior to the newly established deadline for the Franklin Templeton XRP ETF decision.
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