Crypto Scoop: Bitwise Files For a Ripple (XRP) ETF Amid Growing Crypto Adoption

Bitwise files for a Ripple (XRP) ETF as several institutions announce exciting crypto initiatives across the globe. In this edition of the Crypto Scoop, we review the following:

• Price moves of top cryptocurrencies
• Ripple’s expansion and SEC lawsuit
• Vitalik Buterin’s metrics for aligning Ethereum
• Global crypto initiatives and regulation and more.

Price Moves of Top Cryptocurrencies

This week, Bitcoin fell from $65,000 to $60,000, while Ethereum traded at $2,300, sparking mixed reactions from investors and analysts. British multinational bank Standard Chartered suggested that the decline in Bitcoin’s price could present a good buying opportunity for investors. In a note accessed by The Block, analysts from the bank acknowledged the possibility of further declines but encouraged investors to view the dip as a chance to increase their digital asset holdings.

Meanwhile, Bitwise filed to register an XRP exchange-traded fund (ETF) trust in Delaware. While this filing with Delaware’s Division of Corporations represents a preliminary step, it indicates that Bitwise is progressing toward establishing an XRP ETF. The asset manager confirmed the registration, though a formal filing with the U.S. Securities and Exchange Commission (SEC) could still take months.

Additionally, Grayscale Investments launched its new Aave investment fund, offering exposure to AAVE, the governance token for the Aave protocol. The Grayscale Aave Trust announced in an October 3 news release that it is now open for subscription by eligible individual and institutional accredited investors. This move marks another significant step for Grayscale as it expands its range of cryptocurrency investment products.
The Tron network posted impressive Q3 revenue, recording $577.2 million, outperforming several top cryptocurrencies in quarterly income. The revenue was primarily driven by increased activity in stablecoins and the network’s participation in the expanding memecoin market. Tron’s revenue came from a combination of staking (74%) and burning (26%), according to data from Tronscan.

Ripple Expands Global Footprint While SEC Appeals XRP Ruling of 2023

Ripple is making significant strides in its global expansion, gaining vital regulatory approvals and forming strategic partnerships despite facing ongoing legal challenges with the U.S. Securities and Exchange Commission (SEC). In a significant development, Ripple received in-principle license approval from the Dubai Financial Services Authority (DFSA) on October 1, positioning the company to offer cross-border crypto payment services in the United Arab Emirates (UAE). Once fully licensed, Ripple will be able to operate in the Dubai International Financial Center (DIFC), further cementing its presence in the Middle East.

Additionally, Ripple has partnered with Mercado Bitcoin, one of Latin America’s largest cryptocurrency exchanges, to launch crypto-enabled cross-border payment services in Brazil. This collaboration will provide Brazilian businesses with faster, more cost-efficient international payment solutions, leveraging Ripple’s cutting-edge end-to-end payment platform.

However, Ripple’s progress comes amidst an ongoing legal battle with the SEC, which appealed a July 2023 court ruling restricting its ability to regulate XRP, Ripple's native token. The court decision ruled that XRP sales on public exchanges did not meet the legal definition of a security, exempting $757 million in transactions from SEC oversight. While Ripple celebrated this as a major win, the SEC has not relented, seeking further review by the 2nd U.S. Circuit Court of Appeals. 

Meanwhile, the SEC’s chief enforcer, Gurbir Grewal, will step down after concerns about the aggressive policing of cryptocurrency in the industry. On October 11, Grewal will step down after spearheading over 100 enforcement actions, and Sanjay Wadhwa will serve as the acting director of the SEC’s enforcement division until a permanent replacement is named.

Vitalik Buterin Proposes Metrics to Measure Ethereum Alignment Amid Rising Network Activity

Ethereum co-founder Vitalik Buterin has proposed a set of metrics to evaluate how "aligned" projects are with Ethereum’s core values, aiming to ensure a cohesive development of the Ethereum ecosystem. In a blog post on September 28, Buterin emphasized the importance of achieving “Ethereum alignment,” given the diverse array of projects and teams working within the ecosystem. He acknowledged the challenge of maintaining unity among the many contributors, from developers and researchers to local communities, all working to shape Ethereum uniquely.

Buterin stressed that the goal is to avoid fragmentation within the network, stating, "The primary challenge is making sure that all these projects are, collectively, building something that feels like one Ethereum ecosystem, and not 138 incompatible fiefdoms." He suggested that key metrics, such as how open source and interoperable a project is, could help assess alignment. Open-source code, according to Buterin, not only allows for security checks but also minimizes proprietary risks and encourages third-party improvements. He also recommended measuring project decentralization and security using tests such as the “walk away” and “insider attack” metrics, which examine how resilient an application would be if its team disappeared or attempted to sabotage the system.

This proposal comes amid increased activity on the Ethereum network, which has led to a sharp rise in gas fees. According to a report from Coinbase, Ethereum transaction fees surged by 498% between September 16 and 26, driven by a significant uptick in on-chain activity. The median transaction cost rose from $0.09 at the start of the month to $1.69, reflecting heightened network congestion.

Recent Developments in Global Cryptocurrency Regulation and Adoption

Cryptocurrency adoption is surging across Sub-Saharan Africa, with stablecoins now comprising 43% of the region's total transaction volume, according to a recent Chainalysis report. The rising use of stablecoins, especially in countries like Nigeria and Ethiopia, is closely tied to local currency devaluation as people turn to digital assets to preserve value amidst economic instability. The report highlights the strong correlation between deteriorating purchasing power and stablecoin adoption, signalling that this trend will continue as local currencies face further devaluation pressures.

In Taiwan, the Financial Supervisory Commission (FSC) has introduced new Anti-Money Laundering (AML) regulations for virtual asset service providers (VASPs), set to take effect by 2025. These regulations will require crypto firms to comply with updated AML standards fully or face severe penalties, including imprisonment and hefty fines. Taiwan is also expanding its digital asset market by opening access to foreign virtual asset exchange-traded funds (ETFs) for professional investors while maintaining a cautious stance on market risks.

Japan is also reassessing its cryptocurrency regulations. The Financial Services Agency (FSA) has launched a review to evaluate the effectiveness of the current rules under the Payments Services Act. The review could lead to significant changes, including the potential introduction of cryptocurrency ETFs and improved investor protection measures. Analysts suggest that the review could also prompt the reclassification of digital assets as financial instruments, making it easier for the industry to advocate for lower taxes on crypto.

In Brazil, the central bank is incorporating decentralised finance (DeFi) elements into its digital currency project, Drex. The country's central bank governor, Roberto Campos Neto, emphasised the need for a synthetic central bank digital currency (CBDC) that addresses decentralisation, privacy, and programmability. Brazil’s innovative approach could set a precedent for the future of CBDCs globally, blending traditional financial principles with cutting-edge blockchain technology.

On the legislative front, Ohio is reconsidering the acceptance of cryptocurrency for tax payments and fees. A new bill introduced by state senator Niraj Antani aims to allow the state to accept various cryptocurrencies for taxes while enabling state institutions to invest in digital assets. This marks a renewed attempt after a similar initiative in 2018 failed to gain traction.

CFTC, Paypal, SWIFT, Visa Push for Digital Asset Integration as Global Adoption Grows

The U.S. Commodity Futures Trading Commission (CFTC) is reportedly considering a proposal that could allow digital assets to be used as collateral in commodities and derivatives trading. This move, currently under review by the CFTC’s Global Markets Advisory Committee, could significantly advance the integration of blockchain and tokenized assets into mainstream trading. If approved, traders could easily settle transactions using digital assets like BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), signalling a significant shift toward accepting digital assets in the U.S. financial system.

At the same time, PayPal has completed its first business payment using its PYUSD stablecoin, marking a milestone in corporate digital asset adoption. PayPal used its USD-pegged stablecoin, launched in August 2023, to process a payment to accounting giant Ernst & Young through SAP’s digital currency hub. This transaction demonstrates how stablecoins can streamline corporate payments, offering faster and more efficient cross-border settlements.

Meanwhile, Visa has introduced its Visa Tokenized Asset Platform (VTAP), which is designed to enable the issuance and management of digital assets like stablecoins and central bank digital currencies (CBDCs). Currently in its sandbox phase, with participants like BBVA testing its core functionalities, VTAP aims to provide infrastructure for securely minting, transferring, and settling digital assets. Visa seeks to help institutional investors and central banks integrate blockchain technologies, potentially revolutionizing how real-world assets are managed and exchanged.

The international banking network SWIFT announced its plans to trial digital asset transactions starting in 2025. Banks across North America, Europe, and Asia will participate in these trials to explore how SWIFT’s network can bridge the gap between fragmented digital asset landscapes. The trials will focus on payments, foreign exchange, and securities, ultimately providing unified access to multiple digital currencies and assets.