Grayscale to Establish US XRP Trust, Setting the Stage for Possible ETF

Grayscale Investments, a prominent player in the cryptocurrency investment space, has unveiled a new trust dedicated to the XRP cryptocurrency. On September 12, Grayscale made a public announcement about the launch of the Grayscale XRP Trust, designed to offer investors a pathway to invest in XRP.

The Grayscale XRP Trust is now accepting daily subscriptions from qualified individual and institutional accredited investors. This trust operates similarly to Grayscale’s other single-asset investment products and exclusively invests in the token that powers the XRP Ledger (XRPL).

How a crypto trust is different from a crypto ETF

A report by Fox Business suggests that the introduction of the Grayscale XRP Trust might lead to the development of an XRP exchange-traded fund (ETF), which represents a distinct type of product.

Fox Business reporter Eleanor Terrett explains, “An ETF requires approval from the Securities and Exchange Commission as it targets retail investors directly, whereas a trust, aimed at accredited investors, encounters less stringent regulatory scrutiny.”

Furthermore, Grayscale has outlined a four-phase product life cycle for the XRP trust, hinting at a potential future transition to an XRP ETF. According to Grayscale, “Each Product is intended to follow a four-stage life cycle—with the ultimate goal of evolving the product into an ETF.” This process is designed to enhance investor access and transparency as the product matures.

XRP has an “important real-world use case,” says Grayscale

In the launch announcement, Rayhaneh Sharif-Askary, Grayscale’s head of product and research, emphasized that the Grayscale XRP Trust offers investors a chance to engage with a protocol that possesses “an important real-world use case.” He noted, “With its ability to complete cross-border payments within seconds, XRP could fundamentally alter the traditional financial infrastructure.”

The XRP Ledger operates as a decentralized, public blockchain maintained by a worldwide network of businesses and developers, offering solutions for cross-border payments, tokenization, and decentralized finance.

Grayscale Investments holds a significant position in the global cryptocurrency market, managing 222,300 BTC ($12.8 billion) through its Grayscale Bitcoin Trust ETF (GBTC). Since launching GBTC in January alongside ten other issuers, Grayscale has become one of the top Bitcoin sellers, regularly managing multi-billion dollar outflows from its funds.

Following the successful launch of two spot Ether ETFs in July, Grayscale reported substantial outflows from these new offerings as well.

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