Ripple’s native token has trimmed some of its losses after US asset manager Bitwise filed an application for an XRP exchange-traded fund (ETF) in the State of Delaware.
The filing lists the Bitwise XRP ETF as incorporated on September 30, 2024, with CSC Delaware Trust Company as the registered agent.
Though the filing does not indicate an imminent submission to the U.S. Securities and Exchange Commission (SEC), it signals early preparations for the ETF. The registration could still take months before reaching formal SEC approval stages.
This filing follows comments from Ripple CEO Brad Garlinghouse, who hinted at an XRP ETF being “inevitable” after the launch of Bitcoin and Ether ETFs in the U.S. If approved, the XRP ETF would offer institutional investors a regulated avenue to gain exposure to the cryptocurrency.
Rumors of an XRP ETF have circulated for months, including a false filing for a “BlackRock iShares XRP Trust” in November 2023, which temporarily boosted XRP’s price before being debunked.
The application also comes amid ongoing legal battles between the SEC and Ripple Labs. In 2020, the SEC sued Ripple, alleging that its sale of XRP was an unregistered securities offering. While a July 2023 ruling provided Ripple a partial victory, declaring XRP is not a security when traded on public exchanges, institutional sales of the token could still fall under securities regulations.
In the past 24 hours, XRP has seen a 4% decline, likely due to concerns around a potential SEC appeal against Ripple. Despite Ripple’s strong performance earlier this year, with a 20% year-to-date gain, the scheduled release of 1 billion tokens is adding slight downward pressure on XRP’s price.
The news comes nearly seven months after UK-based asset manager, Jupiter Asset Management decided to pull out its investment from an XRP exchange-traded product (ETP) managed by 21Share, due to compliance concerns.
Ripple CEO also said in September that the company is “very close” to launching its U.S. dollar-pegged stablecoin.
Garlinghouse said RLUSD is currently in a private beta phase and will go live within “weeks, not months.”
Ripple already kicked off the first tests of its stablecoin, Ripple USD (RLUSD), on the XRP Ledger (XRPL) and Ethereum mainnets. The company plans to deploy this fiat-backed token on additional blockchain networks in the future.
The decision to develop a stablecoin came after the depegging of USDC 18 months ago, Garlinghouse explained, noting that Ripple saw an opportunity for a credible player to enter the stablecoin market, which is currently dominated by USDT and USDC.
Ripple CEO assured that RLUSD will be overcollateralized, with each unit backed 1:1 by USD reserves or short-term cash equivalents in a bank. To ensure transparency, the firm promised third-party audits and monthly reports on the reserves. Ripple also confirmed its ongoing commitment to both XRP and RLUSD, dismissing rumors that it might shift focus away from XRP.
