Uphold is developing a new method to offer staking for XRP holders by using the capabilities of the Flare network. The approach seeks to bypass XRP’s lack of native staking support by introducing a wrapped version on a DeFi-compatible platform.
Users will have the option to lock their XRP within Uphold’s system. In exchange, they will receive FXRP, a Flare-based synthetic token designed to operate within decentralized finance applications.
Simon McLoughlin, the Uphold CEO, states that Flare has established adequate liquidity to facilitate yield opportunities. This renders the forthcoming staking trial feasible on a broader scale in the first place.
A limited number of users will participate in a controlled beta test, after which Uphold will be able to observe performance and regulatory implications prior to a wide launch.
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Compliance Hurdles May Delay U.S. Access
While the service is expected to launch in select global markets, Uphold remains cautious about introducing the model in the United States. Regulatory concerns tied to the Howey Test remain a significant barrier.
The Howey Test consists of four central aspects that define whether an asset is to be characterized as a security. Uphold is especially concerned about the risk of establishing an implied profit, which would lead to SEC oversight.
McLoughlin emphasized that FXRP’s structure must not resemble an investment contract. Uphold is reviewing legal interpretations closely to ensure its staking model remains compliant.
Even though the SEC has provided further clarification that staking does not necessarily violate securities laws, uncertainty exists. This may lead to its deployment being more slowly in the U.S. than in other jurisdictions.
Flare Network Adds New Utility for XRP Holders
The collaboration of Uphold and Flare could change the practical application of XRP. By allowing staking via FXRP, users can access yield-generation mechanisms without requiring protocol changes.
This transfer may act as a blueprint for how DeFi infrastructure can be utilized to increase utility in tokens without built-in staking mechanisms. It also notes an increasing trend of exchanges offering layered services through selective network integrations.
Conclusion
Uphold’s staking initiative could provide XRP holders with a new way to generate returns. However, regulatory reviews may influence how quickly the model becomes widely available.
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