Uphold is approaching the launch of an Earn on XRP feature that would let customers generate returns on XRP held on the trading platform, with the service potentially covering as much as 1.62 billion XRP in customer holdings.

Uphold Chief Product Officer Paul Underwood said the product has reached the final stages of development after delays pushed back its original timeline. The company expects to share additional information within several weeks, including the service's terms and anticipated interest rates. Underwood discussed the product in a post on X (https://x.com/PaulWavelength/status/2095263415522717737).

Scale of Uphold's XRP Holdings

The size of Uphold's XRP balances makes the planned product notable. The exchange holds roughly 1.62 billion XRP for customers, equivalent to nearly 1.63% of XRP's circulating supply, according to figures in Uphold's official Proof of Reserves report.

That balance places Uphold among the three largest major exchanges by XRP holdings, behind Binance and South Korea-based Upbit.

Uphold's XRP Earn Product Faces a Staking Challenge

The planned earning service differs from conventional staking products available for assets such as Ethereum and Solana. The XRP Ledger does not use a proof-of-stake consensus model and therefore does not offer traditional native staking. As a result, Uphold must use another mechanism to generate returns for customers while making clear that those returns are not blockchain-based staking rewards.

Several structures could potentially support the service, including lending arrangements, wrapped XRP products, or decentralized finance infrastructure. Uphold also has a partnership with Flare Network, a protocol that brings Ethereum-compatible smart contract functionality to XRP, which could provide another route for XRP-related yield products. However, Uphold has not publicly confirmed which mechanism it will use or disclosed any providers that may be involved.

That makes the final product terms particularly important for customers. Details on how the yield is generated, along with custody, liquidity, counterparty, and smart-contract risks, will need to be clearly established when Uphold releases the service information. The broader backdrop also matters: exchange-offered yield products have drawn regulatory scrutiny in the United States in recent years. In 2023, the SEC charged Kraken over its staking-as-a-service program, which was settled with the platform agreeing to discontinue the offering for US customers and paying a fine, illustrating how earn-style products can attract enforcement attention depending on their structure.

Regulatory Approval Could Influence the Rollout

Uphold is also pursuing additional regulatory approval in the United States as it expands its cryptocurrency services. Underwood confirmed the company is seeking a BitLicense from New York, a license that imposes regulatory requirements on cryptocurrency businesses serving residents of the state. The BitLicense regime, administered by the New York State Department of Financial Services since 2015, is widely regarded as one of the more demanding state-level regulatory frameworks for crypto firms.

The effort indicates that Uphold is factoring regulatory compliance and customer protections into the development of the XRP earning product. If launched, the service could give XRP holders a way to seek returns while keeping their assets within Uphold rather than moving them to separate third-party platforms.

The eventual rollout will depend on the final product structure and applicable regulatory requirements. Customers will also need to review the published terms, including expected returns, regional availability, withdrawal conditions, fees, and associated risks. What to watch in the coming weeks is Uphold's disclosure of the yield mechanism and terms, any indication of which partners or protocols are involved, and whether the pending BitLicense application affects the product's availability in New York.

If implemented as planned, Uphold's Earn on XRP product would add a yield-generating function for a significant pool of XRP already held on its platform.

Written by Marcus Renfield, Crypto Market Analyst and Onchain Writer.