The momentum behind cryptocurrency exchange-traded funds (ETFs) continues to build, with Bitcoin and Ethereum spot ETFs now established fixtures in mainstream finance. As regulatory sentiment shifts and institutional interest grows, attention has turned to the next frontier: an XRP ETF. With major asset managers like Grayscale and Franklin Templeton actively pursuing approval, the possibility of a spot XRP ETF is no longer speculative—it’s a question of when, not if.
XRP, introduced in 2012, is the native digital asset of the XRP Ledger, an open-source blockchain developed by Ripple Labs. Designed to address inefficiencies in global payments, XRP enables transactions to settle in just three to five seconds at a cost of approximately $0.0002 per transfer—making it significantly faster and cheaper than both traditional banking systems and leading cryptocurrencies like Bitcoin and Ethereum.
This article explores the latest developments in the XRP ETF approval process, the regulatory landscape, and the broader implications for crypto investment and international finance.
Will There Be an XRP ETF?
The short answer: Yes, the odds are increasingly in favor.
While the U.S. Securities and Exchange Commission (SEC) has yet to approve a spot XRP ETF, multiple filings from reputable financial institutions suggest momentum is building. Grayscale, Franklin Templeton, Bitwise, 21Shares, CoinShares, and WisdomTree have all submitted or advanced applications for XRP-based ETFs.
The SEC’s recent approvals of 11 spot Bitcoin ETFs and eight Ethereum ETFs in 2024 signal a more accommodating stance toward digital asset products. Even more telling, the SEC granted initial approval to Bitwise’s combined Bitcoin and Ethereum ETF—a sign of growing confidence in crypto as an investable asset class.
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With former SEC Chair Gary Gensler stepping down and crypto-friendly nominee Paul Atkins awaiting confirmation, the regulatory environment may become even more favorable. Experts project that a decision on the first XRP ETF could come by late Q3 or early Q4 of 2025, pending resolution of the long-standing legal battle between Ripple Labs and the SEC.
The Path to an XRP ETF: Key Developments
Grayscale’s XRP Trust Conversion Gains Traction
In January 2025, NYSE Arca Inc. filed a Form 19b-4 to convert Grayscale’s XRP Trust into a spot ETF. The SEC formally acknowledged the filing in February, kicking off a review period that could last up to 240 days—placing the decision deadline around October 18, 2025.
If approved, this would allow investors to gain exposure to XRP through a regulated, exchange-traded product without managing private keys or custody solutions. Grayscale’s move reflects a broader trend of traditional financial institutions embracing crypto assets under a new pro-innovation regulatory climate.
Franklin Templeton Enters the Fray
Adding weight to the growing demand, Franklin Templeton filed for its own XRP ETF following the registration of the Franklin XRP Trust in February 2025. The firm’s S-1 filing is under SEC review, with a decision expected by the end of October.
Should it be approved, Coinbase Custody would serve as custodian, Coinbase as primary broker, CSC Delaware Trust Company as trustee, and CBOE BZX Exchange as the listing venue—underscoring the involvement of trusted financial intermediaries.
Franklin Templeton’s entry signals strong institutional appetite for diversified crypto exposure beyond Bitcoin and Ethereum.
SEC Reviews Multiple XRP ETF Applications
The SEC is currently evaluating applications from several major asset managers, including Bitwise, Canary Capital, 21Shares, CoinShares, and WisdomTree. Each acknowledgment triggers a 21-day public comment period, after which the formal review begins.
Bloomberg analyst James Seyffart has expressed optimism about 2025 approvals, though he emphasizes that the outcome of the Ripple vs. SEC case remains pivotal.
How Regulatory Leadership Could Shape Approval
Gary Gensler’s tenure was marked by aggressive enforcement actions rather than clear regulatory frameworks. Many in the crypto industry viewed the SEC under his leadership as adversarial—especially given its prolonged legal battle with Ripple Labs.
However, acting Chair Mark T. Uyeda and incoming Chair Paul Atkins are widely seen as more open to digital assets. The formation of the SEC’s new Crypto Task Force suggests a shift toward establishing clearer guidelines for token classification and market structure.
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Greater clarity on whether XRP is classified as a security or commodity will directly influence ETF approval timelines. A commodity designation—similar to Bitcoin and Ethereum—would streamline the path for XRP ETFs.
Ripple vs. SEC: The Legal Crossroads
At the heart of the XRP ETF debate is a four-year legal battle over whether XRP qualifies as a security.
The SEC sued Ripple in 2020, alleging that the company raised $1.3 billion through unregistered securities offerings. Ripple countered that XRP functions as a digital currency, not a security.
In a landmark 2023 ruling, Judge Analisa Torres determined that programmatic sales of XRP on public exchanges do not constitute securities transactions, effectively treating XRP as a commodity in those contexts.
The SEC has appealed, but recent developments suggest a potential shift:
- Unconfirmed reports indicate the SEC may classify XRP as a commodity during ongoing settlement talks.
- The agency has already dropped enforcement actions against Coinbase.
- The current administration supports pro-crypto policy reform.
If Ripple prevails on appeal, it could set a precedent for other altcoins like Solana (SOL) and accelerate the approval of multiple crypto-based ETFs.
What an XRP ETF Could Mean for Investors
Increased Institutional Adoption
An approved XRP ETF would allow pension funds, hedge funds, and retail investors to gain exposure without holding tokens directly—eliminating custody concerns and simplifying compliance.
Enhanced Liquidity and Price Stability
ETF inflows typically boost trading volume and market depth. Greater liquidity reduces volatility and spreads, making XRP more attractive to risk-averse institutions.
Regulatory Clarity and Market Confidence
SEC approval would implicitly classify XRP as a commodity, resolving years of uncertainty. This clarity could encourage exchanges to relist XRP (where delisted) and inspire confidence in other altcoin projects seeking regulatory recognition.
Portfolio Diversification
For investors already holding Bitcoin and Ethereum ETFs, adding XRP offers exposure to a fundamentally different use case: cross-border payments. This diversification can hedge against sector-specific risks and improve overall portfolio resilience.
Transforming Cross-Border Transactions
XRP was built for one purpose: revolutionizing global finance.
Lower Transaction Costs
Traditional cross-border transfers often involve multiple intermediaries, high fees, and delays. With average costs below a penny and near-instant settlement, XRP offers a compelling alternative—especially if regulatory approval boosts institutional adoption.
Faster Settlement Times
While traditional systems take 2–5 business days, XRP settles in under five seconds. Faster settlements mean improved cash flow for businesses and real-time remittances for individuals.
Building Trust in Digital Payments
An ETF approval would validate XRP’s legitimacy, encouraging banks and fintechs to integrate it into payment rails. This could accelerate the global shift toward digital-first financial infrastructure.
Frequently Asked Questions (FAQ)
Q: When will the first XRP ETF be approved?
A: Most analysts expect a decision by late Q3 or early Q4 2025, depending on the SEC’s review timeline and the outcome of Ripple’s legal appeal.
Q: Is XRP considered a security or commodity?
A: As of now, there's no final classification. However, a 2023 court ruling suggested programmatic sales are not securities transactions—a key step toward commodity status.
Q: How does an XRP ETF differ from holding XRP directly?
A: An ETF offers regulated, custodied exposure without managing private keys. It’s ideal for investors seeking simplicity and compliance.
Q: Could an XRP ETF boost the price of XRP?
A: Yes. Historical trends show that ETF approvals drive demand, increase liquidity, and often lead to price appreciation due to heightened investor confidence.
Q: Which companies are applying for an XRP ETF?
A: Major applicants include Grayscale, Franklin Templeton, Bitwise, 21Shares, CoinShares, and WisdomTree.
Q: What happens if the SEC rejects XRP ETF applications?
A: Rejections could delay adoption but wouldn’t stop future filings. Legal clarity from the Ripple case could prompt revised applications with stronger chances of approval.