CBOE Exchange Files for Spot XRP ETFs Amid Growing Crypto ETF Momentum

• To address regulatory concerns, asset managers propose to  source XRP from secondary markets.
• Ripple’s partial victory over SEC fuels optimism for an XRP ETF.

On Thursday, 6th of February CBOE Exchange sent an application to the SEC to trade spot XRP ETFs, marking significant progress in the crypto ETF landscape. This filing was submitted under the 19B-4 rule, on behalf of four firms WisdomTree, Bitwise, 21Shares, and Canary Capital who  seek approval to launch exchange-traded products tracking XRP, the fourth-largest cryptocurrency by market capitalization. 

XRP Spot ETF Awaits SEC Review

This submission is a part of the final phase in the two-step procedure to introduce a crypto ETF. Once the SEC acknowledges it, the proposal will appear in the Federal Register, and then the process of initiating the agency’s review begins. Most analysts anticipates that, as long as a pro-crypto government and an incoming SEC chair, the green light for XRP spot ETFs would earlier in this year.

“The Exchange contends that granting approval for this proposal (and similar ones) offers the Commission a chance to provide U.S. investors access to XRP through a regulated, transparent exchange-traded instrument designed to mitigate risk for domestic investors,” the filing stated.

Companies Hopes on Ripple’s Legal Win Over SEC

The for XRP exchange-traded funds (ETFs) has significantly risen following Ripple Labs’ partial courtroom success in mid-2023, as it secured a positive outcome in its battle against the U.S. Securities and Exchange Commission (SEC). This judicial decision has been referred to in multiple ETF submissions.

As regulatory review progresses, there are expectations that significant institutional capital could pour into cryptocurrencies. The introduction of XRP-focused ETFs, alongside comparable investment  centered on leading digital assets such as Solana, would provide market participants expanded access to blockchain-based financial instruments.

The SEC Mark Uyeda, backed by Commissioner Hester Peirce, backs up a digital asset task force dedicated to defining the legal classification of cryptocurrencies. Peirce also emphasized the importance of differentiating which tokens qualify as securities also simplifying the compliance procedures for businesses

Unlike earlier cryptocurrency ETFs, Ripple does not have a futures market on the Chicago Mercantile Exchange (CME), a crucial factor the SEC considered when approving Bitcoin and Ethereum funds. To enhance the chances of regulatory acceptance, WisdomTree one of the applicants is adopting protective measures, including acquiring XRP exclusively from secondary markets. This strategy ensures no direct association with Ripple Labs, the firm at the heart of the ongoing legal dispute with the SEC.

Related Reading | SEC Shifts Stance on Solana ETF—Approval Finally in Sight?