Following the recent surge in interest in cryptocurrencies, there has been a significant push from various companies to introduce spot XRP exchange-traded funds (ETFs) on American stock exchanges. A notable development includes an application made to the Securities and Exchange Commission (SEC) intending to convert an existing XRP Trust into an ETF. If the SEC grants approval, this XRP ETF would be listed on the New York Stock Exchange (NYSE).
The move aligns with a broader strategy that has seen other cryptocurrencies, such as Bitcoin and Ethereum, successfully transitioned into ETF formats with the same management entity. This organization has transitioned its investment trusts for Bitcoin and Ethereum into ETFs that are publicly traded. Now, it is pursuing a similar route for XRP, managing an estimated $16 million in this digital asset. The intended ETF would hold XRP directly, but it would also consider operational fees, providing investors straightforward exposure to the asset’s market performance.
Besides the aforementioned application, there are additional contenders in the XRP ETF space, including CoinShares and Bitwise, both of which have also submitted their own filings to the SEC. However, the SEC has yet to make a ruling on these applications. Other cryptocurrencies such as Solana and Dogecoin are also being eyed for potential spot ETF listings.
The SEC has previously taken considerable time to approve spot Bitcoin ETFs, but a recent wave of simultaneous approvals for multiple Bitcoin ETFs has opened doors for more mainstream crypto investment products. Shortly after, spot Ether ETFs also received the green light, prompting further speculation and planning among companies aiming to introduce other spot crypto ETFs into the market.
Currently, XRP is involved in ongoing regulatory discussions with the SEC regarding its status, as the authority has contended that XRP could be classified as an unregistered security. A court ruling concluded that XRP’s sales to retail clients were appropriate, though the company faced sanctions for violating certain laws with its institutional offerings and was fined $125 million. This ruling is still contested by the SEC, which is seeking a larger penalty.
With a new administration taking shape, the cryptocurrency sector is hopeful for more favorable regulations. Recent statements from industry leaders suggest that a spot XRP ETF could soon become a reality, especially in light of changes in SEC leadership which may affect the agency’s approach to ongoing legal matters involving XRP.
Additionally, Ripple has recently acquired two Money Transmitter Licenses from both New York and Texas, further bolstering its regulatory compliance and operational capabilities within the United States.
In summary, the landscape for ETF applications related to XRP and other cryptocurrencies continues to evolve, with increased interest from various companies and potential new regulatory environments that could affect the outcomes of such applications. As the cryptocurrency market develops, the possibility of new investment vehicles like spot ETFs remains a focal point for both retail and institutional investors alike.