XRP News Today: U.S. Regulators Enable Staking Rewards, Paving Crypto's Mainstream Adoption

The U.S. government's recent regulatory shifts have injected fresh momentum into the cryptocurrency market, with the Internal Revenue Service (IRS) and Treasury Department unveiling guidance that clears the path for crypto exchange-traded products (ETPs) to stake digital assets and distribute rewards to investors. This development, announced as the government emerged from a 40-day shutdown, marks a pivotal step toward institutional adoption of crypto, removing a major legal barrier for funds seeking to integrate staking yields into regulated investment vehicles.

Under the updated guidance, crypto trusts must be listed on a national securities exchange, hold only cash and a single type of digital asset, and mitigate investor risks through custodial safeguards.

The IRS and Treasury emphasized that these measures align with the Securities and Exchange Commission's September approval of generic listing standards for crypto ETFs, which paved the way for products tied to Bitcoin, Ethereum, and now XRP. Industry experts, including Consensys' Bill Hughes, hailed the move as a "significant" win for clarity, enabling institutional players to comply with tax rules while offering staking rewards to retail investors.

The regulatory thaw coincided with a surge in XRP-related activity, as Canary Capital's spot XRP ETF-launched on Nasdaq under the ticker XRPC-became the first U.S. product to offer direct exposure to the fourth-largest cryptocurrency by market capitalization. The ETF, structured as a grantor trust holding actual XRP tokens in custody with Gemini Trust and BitGo, mirrors the design of Bitcoin ETFs and bypasses the Investment Company Act of 1940, streamlining regulatory compliance. With an initial net asset value of $25 and $5.25 million in assets, XRPC's debut reflects growing demand for regulated access to altcoins, a trend accelerated by Ripple's broader push to expand XRP's utility in cross-border payments according to market analysis.

Ripple CEO David Garlinghouse underscored the U.S. government's pivot from crypto skepticism to engagement, noting that partnerships with traditional institutions remain challenging amid stalled legislative efforts like the Clarity Act. However, the XRP ETF's launch signals a shift in institutional sentiment, with analysts predicting increased liquidity and adoption for the token. The product also arrives as XRP's price fluctuated near $2.40, a 36% discount to its July high, but saw a 53% spike in trading volume ahead of the ETF's debut.

Meanwhile, the U.S. Senate's passage of a continuing resolution to end the government shutdown through January 2025 reinvigorated the market. The measure, backed by bipartisan support, is expected to restore funding for the Supplemental Nutrition Assistance Program (SNAP) and rehire federal workers, including those at the IRS and SEC. This legislative clarity, coupled with the SEC's streamlined procedures, allowed Canary and other firms to proceed with XRP-related products despite the shutdown.

Market observers linked the regulatory progress to broader crypto optimism. Bitcoin and Ethereum climbed above $106,000 and $3,600, respectively, as risk-on sentiment returned following the Senate vote. The XRP ETF's launch, alongside similar products for Solana and Litecoin, signals a diversification of crypto investment vehicles beyond Bitcoin and Ethereum, reflecting maturing market dynamics.

As the sector awaits further legislative action, the IRS's staking guidance and XRP's ETF debut highlight a narrowing gap between crypto and traditional finance. With institutional players now able to stake assets and distribute rewards, the stage is set for a new era of regulated crypto investment.