- Franklin Templeton has filed for an XRP ETF, joining the likes of Bitwise and Canary Capital.
- There is optimism that with the conclusion of the Ripple lawsuit, the SEC could approve the XRP ETFs.
- The question of XRP’s status as a security has cast a shadow over its adoption by mainstream financial institutions.
Asset management giant Franklin Templeton has filed to offer an exchange-traded fund (ETF) that would track the spot price of XRP, minus associated fees, joining a competitive field that includes Bitwise, Canary Capital, and several other prominent players in the crypto investment space.
This move signals increasing confidence among traditional financial institutions in the potential of XRP-based products despite years of regulatory uncertainty surrounding the cryptocurrency.
The proposed Franklin Templeton XRP ETF
The proposed Franklin Templeton ETF is set to trade on the Cboe BZX exchange, with Coinbase, a leading US-based crypto exchange, serving as the custodian for the fund’s underlying assets.
Investors holding shares in the ETF will gain exposure to XRP’s price movements but won’t be entitled to benefits from any forks or airdrops tied to the XRP blockchain. This structure aligns with similar offerings from competitors, as firms race to bring Ripple-focused investment vehicles to market amid a shifting regulatory landscape.
What are the odds of an XRP ETF approval?
The US Securities and Exchange Commission (SEC) has taken notice of this growing interest, formally acknowledging XRP ETF proposals from other contenders like 21Shares, WisdomTree, CoinShares, Canary Capital, and Grayscale Investments.
While the SEC continues to evaluate these filings, it has already delayed its decision on Grayscale’s proposed XRP ETF until May, reflecting a cautious approach to approving such products.
Adding intrigue to the situation is the potential resolution of Ripple Labs’ long-standing legal battle with the SEC, a case that has loomed large over XRP’s regulatory status. This development could prove pivotal, as the case has been a significant barrier to XRP ETF approvals, creating uncertainty that has kept some investors on the sidelines.
The SEC’s recent dismissal of lawsuits against other crypto firms further fuels optimism that a resolution could clear the way for Ripple-based products.
Analysts have weighed in on the odds of approval, with Bloomberg estimating a 65% chance for XRP ETFs back in February—though that figure predates the latest legal developments. Comparatively, Litecoin, Solana, and even Dogecoin were seen as more likely candidates at the time.
Now, with the Ripple lawsuit potentially nearing resolution and Franklin Templeton’s entry into the fray, the outlook may be shifting. The involvement of a heavyweight like Franklin Templeton suggests a growing institutional belief that the SEC could greenlight these products, especially if regulatory clarity emerges.
If the Ripple lawsuit does conclude favorably, the removal of this longstanding hurdle could transform XRP ETFs from a speculative bet into a tangible reality.
For years, the question of XRP’s status as a security has cast a shadow over its adoption by mainstream financial institutions. A resolution might not only pave the way for ETF approvals but also spark more sustained price momentum for XRP as investors gain confidence in its legal standing.
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