On Friday, 21Shares formally filed an application to issue and trade its own exchange-traded fund (ETF) based on the price of the XRP cryptocurrency. The fund, which will be called the 21Shares Core XRP Trust, will follow a passive investment strategy, without using leverage or derivatives.
This application marks the third time a company has attempted to launch an XRP ETF, following Canary Capital and Bitwise, who had already requested permission from the SEC for their own products, as CriptoNoticias reported.
21Shares, which also issues a bitcoin (BTC) ETF alongside investment firm ARK Invest, specified that its fund “is a passive investment vehicle that does not seek to generate returns beyond tracking the price of XRP.” This implies that there will be no speculative buying or selling of XRP , either at times of high or low prices, with the expectation of future price increases.
“Except in the event of liquidation or extraordinary circumstances, the ETF does not intend to buy or sell XRP outside of transactions necessary for the creation and redemption of shares,” the company says in its filing.
According to the application, the 21Shares Core XRP Trust will issue beneficial interest common shares that will be listed on the Chicago Stock Exchange. It aims to track the performance of XRP, as measured by the CME CF Ripple Index.
The 21Shares Core XRP Trust will issue beneficially-interested common shares that will be listed on the Chicago Stock Exchange. Source: SEC.
The filing also details that the ETF will hold its XRP on Coinbase, one of the largest cryptocurrency exchanges in the world and custodian of the majority of bitcoin ETFs, which they describe as “a regulated third-party custodian incorporated in New York, specializing in custody and trade execution services for digital assets.”
Furthermore, 21Shares has made it clear in its document that XRP is not a security, intervening in the long-running legal dispute over this issue.
“Ownership of XRP does not entitle its holders to any share of a company’s profits or any stream of revenue payments. XRP is a digital asset and its ownership is reflected on a distributed ledger. Furthermore, XRP is not a security and is therefore not subject to the protections of U.S. federal securities laws.”
21 Shares
21Shares’ application for the XRP ETF joins those of Canary Capital and Bitwise, marking a growing interest in cryptocurrency-based investment products that can be traded on regulated exchanges. This move reflects the maturation of the cryptoasset market and the growing acceptance of digital assets like XRP in the traditional financial sphere.
The SEC has yet to issue a decision on any of these applications, keeping both companies and investors interested in these new instruments on hold. Approval of an XRP ETF could open the door to further integration of cryptocurrencies into traditional investment portfolios, potentially increasing the liquidity and accessibility of XRP for both retail and wholesale investors.
