What Is An XRP Spot ETF?

Ripple is the company behind XRP and the XRPL ledger. What is an XRP ETF and how would it impact the ... More crypto market? (Photo by Jakub Porzycki/NurPhoto via Getty Images)
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When the U.S. approved its first spot Bitcoin and Ether exchange-traded funds (ETFs) on January 10, 2024, trading volume was huge, a signal that mainstream investors were eager to access crypto through the brokerage accounts they already use. The growth of the Ethereum and Bitcoin ETFs has shifted attention to the next likely candidate: XRP, the payments-oriented digital asset created in 2012. Franklin Templeton’s proposed XRP spot ETF now sits before the Securities and Exchange Commission (SEC), which must issue a first-deadline decision by June 17, 2025. Approval could redefine how both retail traders and banks gain exposure to one of the world’s largest cryptocurrencies.
Understanding XRP
XRP is the native token of the XRP Ledger (XRPL), an open-source blockchain purpose-built for fast, inexpensive, and energy-efficient value transfer. A typical XRP transaction settles in three to five seconds at a cost of fractions of a cent, consuming far less electricity than proof-of-work networks such as Bitcoin. Ripple, the company that initially fostered XRPL development, markets XRP as a “bridge” asset that lets financial institutions move liquidity across borders without locking capital in nostro accounts.
The token’s trajectory has been shaped as much by court filings as by technical achievements. In 2020, the SEC accused Ripple of selling unregistered securities. A split ruling in July 2023 found that XRP sold on public exchanges was not a security, though certain institutional sales were. The agency appealed but withdrew its final challenge in March 2025, ending a four-year legal cloud and clarifying, if not fully codifying, XRP’s regulatory status in the United States.
What Is A Spot ETF?
An ETF, or Exchange-Traded Fund, is a type of investment fund traded on a stock exchange, similar to individual stocks. It is a basket of assets, like stocks, bonds or commodities, that can be bought and sold during market hours. A spot ETF is a fund that holds the underlying asset itself, not futures or other derivatives. Authorized participants — large trading firms — create new ETF shares by delivering the asset to the fund’s custodian and redeem shares by taking the asset out, a mechanism that keeps the market price close to net asset value. For investors, that structure folds a once-esoteric commodity into the familiar wrapper of intraday-traded shares, complete with regulated custody, audited holdings and simple tax reporting.
What Is An XRP Spot ETF?
An XRP spot ETF would replicate that model with XRP. The sponsor would arrange institutional-grade cold storage for the tokens, while share creation and redemption would ensure the fund tracked spot-market prices. For anyone who already trades equities or bond funds, buying an XRP ETF would feel no different than purchasing an S&P 500 index fund. Yet, it would provide direct economic exposure to the token’s price movements without the technical and security hurdles of managing a crypto wallet.