Ripple’s CEO thinks the XRP ETF is ‘sensible’

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Ripple CEO Brad Garlinghouse said in a recent interview with Bloomberg that the blockchain company would “certainly welcome” the creation of an exchange-traded fund (ETF) based on the XRP cryptocurrency.

According to Garlinghouse, Ripple believes that EFAs around cryptocurrencies other than Bitcoin and Ethereum are inevitable and that there will be multiple EFAs in the crypto ecosystem. He predicts that the crypto industry will see ETFs around baskets, a portfolio management strategy used by institutional investors. Garlinghouse said in an interview that ETFs “identify risks” for investors.

“[It’s like] The early days of the stock market. You don't really want exposure to one stock or one company. You need me [typically] Think about multiplying risks,” Garlinghouse said.

Commenting on the Grayscale ETF and how it was approved, the executive said, “It's only because the courts forced the SEC's hand. [and really] Gensler's hand that EFAs finally came to fruition”. Garlinghouse says products like its spot Bitcoin ETFs make the market “safer and more robust.”

When asked if Ripple is in talks with financial firms about launching an XRP ETF, Garlinghouse declined to comment specifically. However, he reiterated that such a product would benefit the XRP ecosystem and the investor community.

Commenting on the issue of crypto holdings (a requirement if applying for a Ripple ETF), Garlinghouse said he believes in holding crypto as a “fundamental building block” necessary for success as an industry.

Ripple recently received formal Custody & Trust from the New York State Department of Financial Services (NYDFS), a US-based digital asset protection provider with a limited purpose trust charter. This acquisition can be seen as part of Ripple's efforts to gain credibility and compliance amid a regulatory environment that has not been very favorable for crypto over the past two years.

Garlinghouse discussed Ripple's long-term vision, arguing that digital assets should aim to create real-world utility by solving real problems. Citing Bitcoin's success as a store of value, he compared XRP to its predecessor as more “payments-friendly” in terms of its speed, cost and efficiency.

The SEC's lawsuit against Ripple spelled decline for the company and its token, which fell from being the second most valuable digital asset after the regulator went to court in December 2020.

The SEC has raised more than $1.3 billion from Ripple through the illegal sale of XRP without being registered as a security under federal law.

In the year In July 2023, Judge Analisa Torres ruled that Ripple's programmatic sale of XRP did not constitute securities transactions on secondary trading platforms, but required the trial of claims against Bradley Garlinghouse and co-founder Christian Larson. In October 2023, the SEC voluntarily dismissed the claims.

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