According to a report According to Nikkei, SBI Holdings will establish a joint venture with Franklin Templeton, a major American investment management firm, by the end of the year. The joint venture aims to explore the investment environment for spot Bitcoin ETFs in Japan and could be a new hope for a spot XRP exchange-traded fund (ETF) in the United States.
Franklin Templeton, known for its range of mutual funds and exchange-traded funds, will own 49% of the new company, while SBI Holdings will hold a majority stake of 51%. The joint venture comes amid growing interest in spot BTC ETFs following the US Securities and Exchange Commission’s (SEC) approval of 11 Bitcoin-focused ETFs earlier this year on January 11.
The collaboration is particularly notable because of the potential tax benefits for Japanese investors if Bitcoin ETFs can be traded on the domestic securities market. SBI Holdings revealed that it has received “numerous inquiries” from Japanese clients.
The context might be that physical Bitcoin is currently subject to a tax rate of around 55%, whereas a spot Bitcoin ETF would only be taxed at 20.315% on capital gains, as reported Furthermore, treating Bitcoin ETFs as “transfer income” would allow losses to be deferred and gains and losses to be aggregated, potentially allowing investors to pay less tax.
Why an XRP Spot ETF Has Become More Likely
Amidst these developments, the spotlight is also turning to the possibility of an XRP spot ETF. SBI Holdings, a staunch ally of Ripple Labs, has been instrumental in promoting Ripple’s blockchain technology in Asia through their joint venture, SBI Ripple Asiaestablished in 2016. This partnership aims to improve cross-border payment systems using Ripple technology.
Notably, SBI Holdings has also been a strong supporter of XRP, recognizing its potential to facilitate fast and cost-effective international transactions. In 2018, SBI Ripple Asia led the creation of a consortium with several Japanese banks to leverage Ripple’s technologies for domestic and international payments.
During Ripple’s ongoing lawsuits with the SEC, SBI CEO Yoshitaka Kitao has been a vocal supporter of Ripple’s technology. In June, Kitao commented“If the conclusion is reached and XRP is a currency, I think it will be a very high price. If the conclusion (of the trial) is positive, I think the management will immediately go public.”
While the recent announcement does not explicitly mention an XRP spot ETF, the long-standing and deep relationship between SBI Holdings and Ripple Labs could potentially pave the way for such an ETF in the future. Following the approval of Bitcoin and Ethereum spot ETFs in the United States, the introduction of an XRP spot ETF could be a bet on Donald Trump win the US presidential election in November. Given the recent deposits VanEck and 21Shares plan to launch Solana spot ETFs in June, a similar move for an XRP spot ETF by SBI Holdings is not unthinkable.
At press time, XRP was trading at $0.6137.
Featured image created with DALL·E, chart by TradingView.com
