• Coinbase’s XRP futures contract, worth $20,000, launches April 21, tracking the token’s price in USD.
• A court ruling cleared XRP as a non-security, paving the way for its return to regulated markets.
• The futures build on Coinbase’s Solana and Hedera offerings, expanding crypto trading options.

In a significant development, Coinbase Derivatives has submitted a proposal to the U.S. Commodity Futures Trading Commission (CFTC) to list futures contracts for Ripple’s XRP token. The exchange will introduce these contracts on April 21st, giving traders a controlled environment in which to trade XRP price movements. For XRP, a digital asset renowned for its capacity to enable quick and affordable cross-border payments, this could be a significant step. 

A New Trading Structure is About To Launch

The XRP futures contract symbol is XRL, and each month, the contract will be settled in cash. Each contract has a unit size of 10,000 XRP, which means that when XRP is $2 at the exchange, each contract is worth $20,000 by asset value. Each contract will be listed for trading for the current month and two months ahead, with the distinction that if the spot price of XRP changes by more than 10% in a one-hour time frame, trading on the pair will pause as a special condition.

 XRP’s journey has been intense and meaningful, with years of scrutiny from the United States Securities and Exchange Commission (SEC). In 2020, the SEC filed suit against Ripple Labs because XRP was being sold as an unregistered security. A more recent ruling from Judge Torres stated that XRP is not a security and allowed the relisting of XRP on exchanges like Coinbase on time.

Coinbase’s Original Belief about XRP

In January 2019, Coinbase advised the SEC it did not view XRP as a security, which was drafted by the exchange’s team of sophisticated securities attorneys long before the court’s ruling. Indeed, Coinbase is now seeking to list XRP in its futures product offerings, which is consistent with that original belief. Recently, the exchange listed futures contracts on Solana (SOL) and Hedera (HBAR) as part of its plan to integrate cryptocurrencies and traditional futures trading.

With the futures contract on XRP, traders who are seeking a regulated and safe way to gain exposure to crypto assets can do so without having to hold the asset directly. The exchange spoke with Futures Commission Merchants (FCMs) and other players who expressed interest in supporting this effort.

Self-Certification Streamlines the Process

Provided there are no objections from the regulator, Coinbase can self-certify compliance for its futures contracts based on the CFTC‘s self-certification process, triggering a launch. The contract is designed to track the price of XRP, with settlement in US dollars, to retain capital efficiency for traders. This is a continuation of the company’s broader effort to bridge the gap between regulated capital markets and cryptocurrency markets.

In the Ripple case, more than 75,000 holders of XRP engaged as amici to signal their backing of the token and expedite the community’s leverage. After the first ruling, XRP returned to major exchanges. Further, it looks like Coinbase’s filing signals a more deliberate attempt to increase the presence of XRP in regulated trading opportunities.

Conclusion

Coinbase’s proposed launch of XRP futures on April 21 is an important development for XRP because of market demand and regulatory clarity. In addition to expanding trading options, the new product further solidifies XRP as an established digital asset.