This article was first published on The Bit Journal. Can we expect a bright future for the fourth-largest cryptocurrency following the launch of the Franklin Templeton XRP ETF on NYSE Arca?
Asset manager Franklin Templeton has finally launched the Franklin Templeton XRP ETF. The spot XRP ETF has been listed on NYSE Arca at a time when other crypto investment vehicles are awaiting regulatory approval from the US Securities and Exchange Commission (SEC).
According to a recent SEC filing, the Franklin Templeton XRP ETF will trade under the ticker XRPZ as the Franklin XRP Trust and will offer regulated exposure to the XRP token via a grantor trust. Additionally, the trust will carry an annual 0.19% sponsor fee based on net asset value, giving the spot XRP ETF a competitive edge over similar products on the US ETF market.
Lineup of Franklin Templeton Crypto Products
US investors who buy the spot XRP ETF will get exposure to the token without having to buy the cryptocurrency directly. Commenting on the development, David Mann, the director of ETF products and capital markets at Franklin Templeton, stated:
“XRPZ offers investors a convenient and regulated way to access a digital asset that plays a critical role in the global settlement infrastructure.”
The launch of the Franklin Templeton XRP ETF will expand the firm’s lineup of crypto products. The company currently manages several exchange-traded funds (ETFs) aligned with Bitcoin, such as EZBC and EZET, which are associated with Ether, and EZPZ, which is also a spot XRP ETF. All these products enable investors to get regulated exposure to a wide range of digital assets without the need for self-custody.
Launched on the Same Day as Grayscale’s ETF
The approval of the Franklin Templeton XRP ETF on NYSE Arca highlights that the ETF has finally been certified by the SEC. The development also confirms that the spot XRP ETF had met all legal requirements and was nearing its official launch. The Franklin Templeton XRP ETF was launched on the same day as a similar product, Grayscale’s XRP ETF, which came hot on the heels of last week’s launch of the Bitwise spot XRP ETF.
Conclusion
The rollout of the Franklin Templeton XRP ETF, along with several other spot XRP ETF products, marks a significant turn in the token’s fortunes. This is important for a token that faced several delistings some five years ago, following the SEC’s legal proceedings from late 2020.
However, the lawsuit was finally settled last August, when Ripple agreed to pay the SEC $125 million without admitting wrongdoing. Since the end of the legal challenge, XRP has continued to see better days, especially as regulators clarify rules for digital assets. The Franklin Templeton XRP ETF approval is a part of a growing trend of institutional investors entering the crypto space via regulated investment vehicles.
Glossary to Key Terms
XRP ETF: A financial product that aims to let investors gain exposure to the price of XRP—one of the largest cryptocurrencies—without actually holding the digital asset directly.
NYSE Arca: An electronic securities exchange owned by the New York Stock Exchange (NYSE) that facilitates the trading of stocks, options, and ETFs.
Franklin Templeton: A global investment management firm that provides a wide range of investment products and services, such as mutual funds, ETFs, and private equity.
Frequently Asked Questions about XRP ETFs
What does ETF mean in crypto?
An exchange-traded fund (ETF) issues publicly traded securities that offer exposure to the price movements of bitcoin futures contracts.
What Is a Spot XRP ETF?
A spot XRP ETF is a traditional exchange-traded fund that physically owns real XRP tokens and lists shares on major U.S. stock exchanges.
Is XRP ETF the same as XRP?
An XRP ETF is an investment in the Fund, which is not the same as a direct investment in the XRP token (“XRP”).
What happens to XRP when it becomes an ETF?
The launch of XRP ETFs markedly improves XRP’s liquidity, enticing both institutional and retail investors. This surge in liquidity could stabilize prices, making XRP a more dependable asset.
References
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