XRP ETF Applications Are Gaining Significant Traction, Especially with the Entry of $1.5 Trillion Franklin Templeton

XRP ETF applications are significantly gaining traction in the US, especially with the entry of $1.5 trillion Franklin Templeton in the game. By Ambika Devan.

The U.S. Securities and Exchange Commission (SEC) has been on a roll with approving several exchange-traded fund (ETF) applications, especially in the cryptocurrency sector. While the agency has faced criticism for the slow pace of approving new crypto ETFs, recent reports suggest that it could be making swift progress in another area.

A recent SEC filing has revealed a surprising five-page document that could have huge implications for the next stage of institutional crypto adoption. The paper, titled “Comprehensive Proposal: XRP as a Strategic Financial Asset for the US,” outlines how the SEC envisions unlocking liquidity and saving on transactional costs using the crypto asset.

The SEC’s proposal focused on integrating XRP in Nostro accounts, or bank accounts held by financial institutions for foreign trade. According to the agency, these accounts currently have over $27 trillion in assets. Of this amount, the U.S.’s share is more than 18%, which translates to over $5 trillion.

With an average transaction fee of 0.5%, moving the funds allocated in XRP could save up to $7.5 billion in annual costs.

However, the SEC admitted that XRP must overcome several regulatory roadblocks to meet such targets. The agency said it has to classify the asset and settle its case with Ripple.

In addition, the Department of Justice must remove its restrictions on bank transactions using the digital asset, and the Federal Reserve must directly integrate the utilization of XRP into its financial policy.

The agency said all its recommendations could be boosted by an Executive Order that mandates the SEC, DOJ, and the Treasury Department to classify XRP as a payment asset and abandon the Ripple case.

It could also leverage from an emergency financial legislation ordering banks to integrate the crypto asset for liquidity solutions. Meanwhile, the Fed must craft a supplemental rule allowing banks to use the digital asset to replace Nostro.

All these could complement the USA’s target of becoming a Bitcoin powerhouse, as the government could use the $1.5 trillion freed capital to top up its digital assets stockpile.