CBOE BZX Exchange has taken a significant step toward the launch of spot XRP exchange-traded funds (ETFs) by filing 19b-4 documents with the U.S. Securities and Exchange Commission (SEC).
What is a 19b-4 Filing?
A 19b-4 filing is an official request to change a rule with the SEC, allowing companies to propose new investment products such as ETFs. In this case, the filings indicate the asset managers’ intent to offer XRP-based ETFs, which would track the price of XRP, the fourth-largest cryptocurrency by market value. If the SEC approves the filings, it would mark a milestone for the crypto space, as it would bring the first spot XRP ETFs to the U.S. market. These ETFs would allow investors to gain exposure to XRP’s price movements through traditional brokerage accounts, bypassing the complexities of directly purchasing the cryptocurrency.
The Four Asset Managers Involved
The four asset managers behind the filings are well-established in the ETF space and are vying to introduce XRP ETFs:
- Bitwise: Known for its cryptocurrency funds, Bitwise was the first to file a Form S-1 for its Bitwise XRP ETF back in October. - 21Shares: A global leader in crypto-backed ETFs, 21Shares filed its XRP ETF application in November. - Canary Capital: Just behind Bitwise, Canary Capital filed its XRP Trust S-1 application shortly after Bitwise. - WisdomTree: A significant player in the ETF market, WisdomTree filed its XRP Fund with the SEC in December.
Each of these companies had already submitted S-1 filings, the initial step in the ETF registration process, before the 19b-4 filings were made.
The SEC’s Changing Approach
The SEC has historically been cautious when it comes to approving crypto ETFs, especially for assets beyond Bitcoin and Ether. However, recent shifts in leadership within the SEC suggest a possible change in direction. Under former SEC Chair Gary Gensler, the agency took a hard stance against many crypto ETF proposals. But with the appointment of Mark Uyeda as acting Chair and Hester Peirce leading the newly-formed crypto task force, there has been a marked change in the SEC’s approach. Peirce has made it clear that one of her goals is to clarify which 'crypto assets' qualify as securities. This shift could have far-reaching implications, not only for XRP but for the broader crypto space, as it may lead to the SEC offering clearer guidelines on what qualifies for ETF approval. Spot XRP ETFs could have a major impact on the market. According to analysts, these products could attract substantial investments in their first year of operation.
While the 19b-4 filings are a positive sign, they do not guarantee approval. The SEC will now review these filings and may open the process for public comments. The outcome of this filing is crucial for both the future of XRP and the broader cryptocurrency industry.
