SBI Holdings and Franklin Templeton Joint Venture Raises Hopes for Spot XRP ETF in the US

According to a report by Nikkei, SBI Holdings will establish a joint venture with Franklin Templeton, a prominent US investment management company

Financial services holding company SBI Holdings plans to establish a joint venture with US investment management firm Franklin Templeton by the end of this year, Nikkei reports.

The joint venture will explore the investment environment for spot Bitcoin ETFs in Japan. This could also be a new hope for a spot XRP Exchange Traded Fund (ETF) in the United States.

Franklin Templeton, best known for its vast lineup of mutual funds and exchange-traded funds, will own 49% of the new company, while SBI will have a majority stake of 51%. The venture comes amid growing interest in spot BTC ETFs following the US Securities and Exchange Commission’s approval of 11 Bitcoin-focused ETFs earlier this year on January 11.

The collaboration is particularly significant for Japanese investors due to the potential tax advantages if Bitcoin ETFs are traded on the domestic securities market. According to SBI, they have received “many requests” from Japanese customers.

The backdrop to this is that physical Bitcoin is currently subject to a tax rate of around 55%, whereas a spot Bitcoin ETF would be taxed at only 20.315% on capital gains, as reported by Japanese news outlet Coinpost. Moreover, the treatment of Bitcoin ETFs as “transfer income” would allow for the carrying forward of losses and aggregation of gains and losses, which could net investors smaller tax bills.

A Spot XRP ETF Became More Likely

These developments also place a spotlight on the possibility of a spot XRP ETF. SBI, a staunch supporter of Ripple Labs, has been at the forefront of promoting Ripple’s blockchain technology in Asia through their joint venture SBI Ripple Asia, which was established in 2016 to enhance cross-border payment systems using Ripple’s technology.

SBI has also been a major backer of XRP, highlighting its potential to facilitate fast and cheap international transactions. In 2018, SBI Ripple Asia led the formation of a consortium with several Japanese banks to adopt Ripple’s technologies for domestic and international payments.

Throughout Ripple’s ongoing legal challenges with the SEC, SBI’s CEO Yoshitaka Kitao has been a vocal advocate for Ripple’s technology. In June, Kitao remarked, “If the conclusion is reached and XRP is a coin, I think it will be a very expensive price. If the conclusion (of the trial) is positive, I think the management will immediately go public.”

While the recent announcement doesn’t mention a spot XRP ETF specifically, the long-standing and deep relationship between SBI and Ripple Labs could pave the way for such an ETF in the future. Following the approval of spot Bitcoin and Ethereum ETFs in the US, the introduction of a spot XRP ETF could be on the cards, especially given the recent filings by VanEck and 21Shares to launch spot Solana ETFs in June.

XRP’s price is currently down 0.6% over the past 24 hours and trades at $0.6137 at press time.

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