JPMorgan Finds It Difficult for ADA, XRP and SOL as Reserves to Be Approved by Congress
- US crypto reserves limited by legislation and regulatory uncertainty.
- Volatility and regulation prevent the inclusion of XRP, ADA, and SOL.
- Global central banks resist including cryptocurrencies in reserves.
Following the recent approval of Bitcoin as a reserve by the state of Texas, interest in other cryptocurrencies such as XRP, ADA (Cardano) and SOL (Solana) has increased considerably. However, according to recent analysis by JPMorgan, led by Nikolaos Panigirtzoglou, the likelihood of these cryptocurrencies being used as reserves in the United States is low. The bank expresses skepticism, especially given the legislative barriers and regulatory uncertainties that still surround these assets.
JPMorgan notes that even with the new openness to Bitcoin, the inclusion of cryptocurrencies such as XRP, SOL and ADA faces significant challenges. “If a U.S. strategic cryptocurrency reserve is eventually approved, it will be difficult to include smaller tokens outside of Bitcoin and Ethereum,” says Panigirtzoglou. The volatility of these assets, coupled with liquidity and regulatory issues, particularly involving XRP and its history with the SEC, are factors that complicate their acceptance in an institutional setting.
The resistance to other attempts at state-level legislation in the US, such as in Montana, North Dakota, South Dakota and Wyoming, where similar proposals were rejected, sets a worrying precedent for expanding these ideas nationwide. Concerns about the instability of these cryptocurrencies and the associated risks remain the main obstacles.
In the international context, hesitation is also evident among central banks. Large institutions, such as the Swiss National Bank and the European Central Bank, have already positioned themselves against the incorporation of cryptocurrencies into sovereign reserves, reinforcing the caution that still permeates the traditional financial sector in relation to these digital assets.
Furthermore, the cryptocurrency market is facing a bearish period, as evidenced by the record outflows from cryptocurrency ETFs. This scenario contributes to the recent pressure that has caused Bitcoin to test the $80 zone, despite the popularity and technological potential of projects such as ADA, XRP and SOL, which are still fighting for a space of legitimacy in the corridors of monetary and financial policy in the United States.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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