Canary Capital seeks SEC approval for XRP ETF, offering an alternative to direct XRP.
The ETF will track XRP’s value using the CME CF Ripple-Dollar Reference Rate benchmark.
Canary Capital’s XRP ETF targets traditional brokerage accounts, simplifying access to XRP.
Canary Capital Group LLC has submitted a registration with the U.S. Securities and Exchange Commission (SEC). The company is seeking approval for an exchange-traded fund (ETF) focused on XRP. This new product is designed to make it easier for investors to access XRP through traditional brokerage platforms. Instead of holding XRP directly, investors can gain exposure via the ETF. This approach provides an alternative for those interested in cryptocurrencies like XRP.
The Canary XRP ETF will track the value of XRP, the digital asset used on the XRP Ledger. The filing with the SEC reveals that the ETF will use the CME CF Ripple-Dollar Reference Rate – New York Variant. This benchmark aggregates data from major XRP trading platforms to reflect the current price. The goal of the ETF is to give investors exposure to XRP’s price movements. At the same time, it will manage operational costs and risks.
Unlike mutual funds or registered investment companies, the ETF will not operate under the Investment Company Act of 1940. Instead, it will function as a digital asset trust. This means that shares can be created and redeemed in baskets to ensure liquidity.
Addressing Market Risks
Canary Capital has acknowledged the risks tied to digital assets like XRP. The filing points out the volatility of the XRP market and regulatory uncertainty in the crypto space. Despite these challenges, Canary Capital aims to make XRP more accessible to investors who prefer not to manage the asset directly.
This ETF filing follows a similar move by Bitwise, which also applied for an XRP-focused ETF. The interest in such funds reflects a growing trend among firms seeking to provide broader access to digital assets. However, whether the SEC will approve the Canary XRP ETF remains uncertain due to ongoing regulatory scrutiny.
Targeting Traditional Brokerage Accounts
Canary Capital’s ETF aims to reach investors who use traditional brokerage accounts. The trust will not act as an investment adviser or directly hold XRP. Instead, liquidity will be managed by authorized financial participants. This approach ensures shares are available for purchase and redemption.
The action of Canary Capital could make more products based on cryptocurrencies to be more accessible. The ETF aims to serve investors who want exposure to XRP and blockchain solution investments. Nevertheless, the outcome of the SEC’s ruling will determine whether the ETF advances in light of the legal shifts since the commodity’s status is not well settled.
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