NYSE Arca Working Towards XRP Trust Spot ETF

NYSE Arca has put forward a plan to list Grayscale’s XRP Trust as a spot ETF. This could make it much easier for regular investors to buy and sell XRP through traditional investment accounts.

Right now, Grayscale’s XRP Trust manages $16.1 billion worth of XRP and helps U.S. investors gain exposure to XRP without having to buy the cryptocurrency directly. If this trust becomes an ETF, many more people would be able to invest in XRP through their regular brokerage accounts.

The proposed ETF has been carefully designed with several safety features. The price of XRP in the fund would be determined using CoinDesk’s Index, which combines price data from major exchanges like Coinbase, Kraken, and Bitstamp. This helps prevent price manipulation. All the XRP would be kept secure in cold storage by Coinbase Custody Trust Company, with private keys stored in secure vaults spread across different locations.

To make sure everything runs smoothly and safely, the ETF would use a cash-based system for creating and redeeming shares. This means that authorized participants (the companies that help ETFs work) would use cash rather than handling XRP directly. The fund would update its value every 15 seconds during trading hours, which would run from 4:00 AM to 8:00 PM ET. Both NYSE and FINRA would watch trading activity closely to catch any potential wrongdoing.

Each share of the trust currently represents about 19.9659 XRP, making it easy for regular investors to participate. The fund won’t actively trade XRP – it’s simply designed to track the price of XRP minus any fees and expenses. Grayscale Investments Sponsors, LLC will manage the fund, and they plan to lower their current 2.5% fee if the conversion to an ETF is approved.

The Securities and Exchange Commission (SEC) has 45 days to make their first decision about the proposal, though they can extend this period up to 90 days. The countdown starts when the proposal is officially published in the Federal Register. During this time, anyone can send their thoughts about the proposal to the SEC.

While other cryptocurrency ETFs have been approved before, this one is specifically designed for XRP. If the SEC gives it the green light, it would be a major step forward for XRP in the traditional financial world, potentially making it much easier for everyday investors to include XRP in their investment portfolios.