CME Group is set to launch XRP futures on May 19, pending regulatory approval. The new product will offer two contract sizes, one tied to 2,500 XRP and the other to 50,000 XRP. These futures contracts are cash-settled and will be benchmarked against the CME CF XRP-Dollar Reference Rate, calculated daily at 4:00 P.M. London time.
Global Head of Cryptocurrency Products at CME Group, Giovanni Vicioso, highlighted the increasing demand for XRP and its native blockchain, the XRP Ledger (XRPL), from both institutional and retail investors. He emphasized that the upcoming XRP futures will provide a capital-efficient option for portfolio management and risk hedging.
XRP currently holds the position as the fourth-largest cryptocurrency, with a market capitalization exceeding $126 billion. Recent data from CryptoSlate shows XRP trading at around $2.19, experiencing a 2% decrease in the past 24 hours.
The introduction of XRP futures by CME Group will expand its existing lineup of cryptocurrency derivatives, which includes Bitcoin, Ethereum, and Solana. Vicioso noted the growing demand for regulated derivatives products covering a wider range of tokens as the digital asset market continues to evolve.
Coinbase Derivatives recently introduced CFTC-regulated XRP futures, aligning with CME Group’s move into the XRP market. These developments could play a crucial role in the potential approval of spot XRP exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC).
Tony Edwards, the founder of the Thinking Crypto podcast, expressed optimism about the significance of these developments for XRP spot ETF approval. In the past, the SEC has cited the absence of a regulated futures market as a reason for denying spot ETF applications for altcoins. With XRP futures falling under CFTC oversight, this obstacle may no longer be a hindrance.
Asset managers like 21Shares, Canary, and Bitwise have already submitted proposals for spot XRP ETFs. JPMorgan has forecasted that these ETFs could attract up to $8 billion in assets within their first year.
Overall, the introduction of XRP futures by CME Group marks a significant step in further legitimizing XRP within the US financial market and potentially paving the way for the approval of spot XRP ETFs.