Uphold’s CEO, Simon McLoughlin, has recently sparked excitement among XRP enthusiasts. In an interview with The Block, McLoughlin discussed Uphold’s exploration of enabling users to stake and earn yield on XRP, which he described as “feasible and promising”.
However, the process presents a unique challenge due to XRP’s non-proof-of-stake nature. “Staking, which involves locking up tokens to support a proof-of-stake network, isn’t applicable to XRP,” McLoughlin explained. “Therefore, we’re looking for an alternative solution.”
Uphold is contemplating collaborating with Flare, a burgeoning DeFi ecosystem McLoughlin regards as “flourishing”. He elucidated, “Flare gives you the capacity to generate a wrapped version of XRP on the Flare network.”
Under the proposed model, once a user decides to stake XRP, Uphold would secure that amount in its XRP reserve. McLoughlin outlined the process, “We would then transmit a calculation of the value to the Flare blockchain and create a wrapped version of XRP, known as FXRP.”
Thanks to the ample liquidity on Flare, an XRP staking beta test is feasible. “The substantial liquidity in the pools makes it possible for us to consider launching a beta test for select users,” McLoughlin affirmed.
Uphold boasts over 10 million users across more than 140 countries. The firm recently launched a new debit card and a direct deposit bonus plan in the U.S., enabling users to earn a 4% XRP cash-back-style bonus.
However, launching an XRP staking program in the U.S. presents legal challenges. Uphold must ensure that wrapping XRP does not unintentionally create a security, violating the Howey Test. Despite these complexities, McLoughlin remains confident, “We are certain that we can pursue the wrapped XRP route in some parts of the world.”
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