Uphold is developing a new method to offer staking for XRP holders by utilizing Flare Network's capabilities. The new approach provides an alternative to XRP's lack of native staking support.
New Staking Method via Flare
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 financial applications.
Simon McLoughlin, the Uphold CEO, states that Flare has established adequate liquidity to facilitate yield opportunities.
Regulatory Hurdles in the US
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.
Benefits for XRP Holders
The collaboration between 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.
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.
