Ripple CEO: Spot ETFs Are 'Inevitable'

Earlier this week, Ripple Labs CEO Brad Garlinghouse appeared on Bloomberg Crypto to discuss topics related to his company. The most notable point of discussion was surrounding the potential for a spot XRP exchange-traded fund (ETF).

During the interview, Garlinghouse said that Ripple would welcome an XRP ETF and that it is "inevitable that there will be multiple ETFs around different tokens."

Garlinghouse also said that there is a potential for spot ETFs around baskets of crypto. This is a strategy some investors use by combining many assets into a single product. He said that baskets can help "diversify that risk given there’s so much excitement around the ETF dynamic here."

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During the interview, Garlinghouse was asked about the release of an XRP ETF. While he did not give a definitive answer from a financial standpoint, he said it "makes sense for the XRP community." 

The Ripple CEO also discussed the company's recent acquisition of Standard Custody & Trust. The acquisition is supposed to help Ripple improve its custodial services and regulatory compliance. Garlinghouse called it a "basic building block" for any crypto project and that "everything we have done at Ripple has compliance first." 

A lawsuit between Ripple and the Securities and Exchange Commission (SEC) was also discussed. The SEC filed a lawsuit against Ripple in 2020, arguing that it raised money through XRP without registering it as a security. It was later ruled that XRP trades did not constitute securities transactions and the lawsuit was dismissed.

Despite the dismissal of the case, Garlinghouse still saw this as a major headwind for XRP, attributing some of the decline in price to the lawsuit. However, he believes that the "long-term view [of crypto] is about … how do you create utility and really solve real-world problems with these different digital assets."

Though the lawsuit may have caused some short-term issues, Ripple's long-term outlook is about value creation through payment processing. "XRP and its dynamics are very fast, very efficient and low cost on a per-transaction basis," making it ideal for payments, he said.

Garlinghouse wants to lean into these characteristics going forward to continue to provide a digitized and decentralized payment system for financial institutions. Through recent acquisitions and comments from the CEO, the potential for and discussions surrounding an XRP ETF is heating up. 

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