Uphold CEO discusses XRP staking via Flare, weighs US regulatory hurdles

Without a doubt, some XRP devotees were ecstatic when Uphold said at the end of last month it was exploring ways to let users stake and earn yield on the token.Uphold CEO Simon McLoughlin expressed optimism about the possibility during a recent interview with The Block, saying the XRP staking appears both “feasible and promising.”But there’s a catch: “[It’s] challenging because XRP isn’t a proof-of-stake network,” McLoughlin said. “There’s not a staking mechanism you can rely on.”Staking refers to earning yield by locking up tokens to support a proof-of-stake network. Because XRP doesn’t operate that way, Uphold is eyeing a workaround.Uphold is considering working with Flare — a growing DeFi ecosystem that McLoughlin praised as “thriving” — could be the solution. "Flare allows you to create a wrapped version of XRP on the Flare network," he saidUnder the proposed model, once a user opts to stake XRP, Uphold would lock that amount in its own XRP reserve. Then, "through a function, we would send a calculation of the value across to the Flare blockchain and create a wrapped version of XRP, but it's a Flare asset, it's FXRP," he said.XRP staking beta testMcLoughlin said the depth of liquidity on Flare is making an XRP staking beta test viable."There's a depth of liquidity in those liquidity pools that makes it viable for us, for the first time, to look at offering a beta test for a number of users," he said.Uphold has over 10 million users in over 140 countries, the company has said. The company recently announced a new debit card and direct deposit bonus plan in the United States, which will allow users there to earn a 4% XRP cash-back-style bonus.While launching an XRP staking program in the U.S. wouldn't hurt efforts of Uphold nabbing new customers there, sorting out the legalities could take time as the company will need to ensure the wrapping of XRP isn't “inadvertently” creating a security and running afoul of the Howey Test, said McLoughlin.The Howey Test is designed to determine if a transaction constitutes an investment contract. McLoughlin said the SEC saying at the end of last month staking doesn't violate security's law is a positive sign."We've just got to make sure that by wrapping XRP and putting it on a different network, there's not an interpretation that says, well, actually, you Uphold are manufacturing a security that creates an expectation of profit," he said.McLoughlin admits its a bit more complex in the U.S. and that might alter Uphold's plans, but elsewhere, he doesn't expect such hurdles."We are confident that in certain parts of the world we're going to be able to go that wrapped XRP route," he said.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.