Grayscale Investments has announced a new crypto trust linked to the XRP cryptocurrency, potentially paving the way for an XRP ETF.
Launch of Grayscale XRP Trust
Grayscale Investments, one of the largest cryptocurrency investment firms, officially announced the creation and public launch of the Grayscale XRP Trust on September 12. This trust enables investors to gain exposure to the XRP cryptocurrency. Grayscale noted that the trust is immediately open for daily subscription by eligible individual and institutional accredited investors. Like Grayscale’s other single-asset investment trusts, it is solely invested in the tokens underpinning the XRP Ledger (XRPL).
Difference Between a Crypto Trust and a Crypto ETF
According to a report by Fox Business, the launch of the Grayscale XRP Trust could pave the way for an XRP exchange-traded fund (ETF), which is a different product. Fox Business' Eleanor Terrett reported that an ETF must be approved by the Securities and Exchange Commission (SEC) since it is marketed directly to retail investors, whereas a trust has a lighter regulatory touch and is sold to accredited investors. The report also mentioned that Grayscale has published an intended four-phase product life cycle for the XRP trust, suggesting a potential XRP ETF in the future. “Each product is intended to follow a four-stage life cycle — with the ultimate goal of uplisting the product to an ETF,” Grayscale said on a dedicated FAQ page. “As a product progresses through this intended lifecycle, there is a correlated increase in investor access and transparency,” the firm noted.
Practical Use of XRP
In the announcement, Grayscale’s head of product and research, Rayhaneh Sharif-Askary, pointed out that the Grayscale XRP Trust gives investors exposure to a protocol “with an important real-world use case.” She added: “By facilitating cross-border payments that take just seconds to complete, XRP has the potential to transform the legacy financial infrastructure.” The XRP Ledger is a decentralized public blockchain led by a global community of businesses and developers. The XRPL is designed to provide a number of use cases, such as cross-border payment solutions, tokenization, and decentralized finance.
Grayscale Investments continues to expand its offerings by introducing a new trust linked to XRP. This development could be a significant step toward creating the first XRP ETF, offering investors various ways to gain exposure to these cryptocurrency assets.
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