Top Pundit Raises Concerns Around XRP Futures Contracts on CME Group: Details
April 25, 2025
Prominent crypto commentator and XRP community figure Eri has drawn the attention of the XRP community to a crucial detail of the CME XRP futures contract.
While XRP proponents beam with excitement over the imminent launch of the Chicago Mercantile Exchange (CME) XRP futures contract, popular community figure Crypto Eri has raised concerns about the contract’s settlement.
For perspective, the prominent derivatives marketplace announced yesterday that it would launch an XRP futures contract on May 19, after months of speculation. The product will provide institutional derivative exposure to XRP, the fourth-largest cryptocurrency by market cap, with contract sizes of 50,000 XRP and 2,500 XRP.
Futures Contract Not XRP Settled
Meanwhile, Crypto Eri highlighted in a Thursday post that the CME XRP futures contract will be cash-settled in US dollars and not in XRP. For the uninitiated, this means that all transactions, including the initial purchases and final settlement for the derivative product, will be handled in USD.
Interestingly, this sidelines the underlying asset (XRP), ensuring minimal interaction between contract buyers and the cryptocurrency. Furthermore, the contract clause has replaced the spot XRP volume that users would have handled from deposits to a brokerage account for trading and settlement when the contract expires with USD, removing the need to actually hold XRP.
Notably, Mickle, another XRP community figure, pointed out that the derivatives marketplace follows a similar approach for its Bitcoin contracts, looking to highlight that it is a common practice.
In response, Eri stressed that there is a need for derivative contracts that, at the very least, allow purchases with XRP, if not settlements as well. Notably, a physically settled XRP futures contract will enhance the asset’s liquidity, attract institutional exposure, and influence its price action.
We want contracts that at the very least can be purchased in XRP, if not settled. One cannot directly buy CME XRP futures contracts using XRP. CME XRP futures are USD cash-settled contracts, meaning all transactions, including purchases and settlements, are conducted in USD. The…
— Crypto Eri ~ Carpe Diem (@sentosumosaba) April 24, 2025
Currently, Bitnomial XRP Futures Remain the Only Institution-Grade Contract Physically Settled in XRP
The CME XRP derivative contract will be cash-settled, while the Coinbase Derivatives XRP product, launched earlier this week, also settles contracts in USD.
XRP’s Growing Institutional Interest Sparks Optimism
Nonetheless, the growing adoption of XRP by institutions has fueled optimism among proponents. Particularly, the Commodity Futures Trading Commission’s (CFTC) approval to list futures contracts tracking the prominent digital asset confirms the change in its classification as regulatory tides recede in the United States.
With XRP’s potential regulatory clarity and growing institutional interest, an XRP spot exchange-traded fund (ETF) may not be far off. Multiple applicants, including Grayscale, Bitwise, Canary Capital, and others, are seeking approval from the US Securities and Exchange Commission. Notably, the arrival of pro-crypto chair Paul Atkins has boosted the chances of approval.
