Regulators Face Tough Questions on XRP and DOGE's Place in Mainstream Finance

The U.S. Securities and Exchange Commission (SEC) has announced that it will delay the final decisions on applications for XRP and DOGE exchange-traded funds (ETFs) pending further review. The decision follows a recent increase in regulatory scrutiny over the classification and market readiness of these cryptocurrency assets. The agency cited the need for a more detailed evaluation of the legal and market implications associated with the tokens.

Several financial institutions had submitted applications for XRP and DOGE ETFs in the past quarter, with some expecting approval by mid-2024. These applications were based on the assumption that the SEC would adopt a more consistent approach to cryptocurrency ETFs, particularly following the recent approval of Bitcoin and Ethereum ETFs. However, the agency has now stated that it is taking additional time to assess the risks and market impact of approving these funds.

In a statement, the SEC emphasized its responsibility to ensure investor protection and market integrity. It noted that while the Bitcoin and Ethereum ETFs had met a set of specific criteria for approval, the XRP and DOGE tokens have raised additional questions regarding their legal status and market volatility. The agency did not specify a new timeline for the decisions but indicated that further discussions with industry stakeholders were underway.

The delay has caused a mixed reaction in the cryptocurrency market. Some investors expressed disappointment, viewing the decision as a setback for broader acceptance of digital assets in the traditional financial system. Others, however, welcomed the extended review as an opportunity for more transparency and regulatory clarity. Analysts noted that the outcome of these decisions could have significant implications for the future growth and regulation of the crypto market.

Meanwhile, legal challenges involving the SEC and Ripple Labs, the company behind XRP, remain ongoing. These legal proceedings have added to the regulatory uncertainty surrounding XRP. The SEC's extended review of the XRP ETF application is seen by some as a reflection of the broader legal and regulatory environment facing the cryptocurrency industry.

Despite the delay, the interest in XRP and DOGE ETFs has not diminished. Many institutional investors and financial advisors continue to express support for the inclusion of these tokens in the ETF market, citing their growing adoption and market capitalization. However, they also acknowledge that regulatory clarity is essential before such products can be offered to the public.