Reported by Cointelegraph: Grayscale XRP Trust could potentially pave the way for an XRP ETF, subject to approval by the US Securities and Exchange Commission.
Grayscale Investments, a major cryptocurrency investment firm, is debuting a new crypto trust linked to the XRP cryptocurrency.
Grayscale officially announced on Sept. 12 the creation and public launch of Grayscale XRP Trust, which enables investors to gain exposure to XRP.
The firm noted that Grayscale XRP Trust is immediately open for daily subscription by eligible individual and institutional accredited investors. It functions like Grayscale’s other single-asset investment trusts and is solely invested in the token underpinning the XRP Ledger (XRPL).
How a crypto trust is different from a crypto ETF
According to a report by Fox Business, the launch of Grayscale XRP Trust could potentially pave the way for an XRP exchange-traded fund, which is a different product.
“An ETF must be approved by the Securities and Exchange Commission since it is marketed directly to retail investors, while a trust’s structure and sales pitch to so-called accredited investors gets a lighter regulatory touch,” Fox Business’ Eleanor Terrett reported.
The report also mentioned that Grayscale has published an intended four-phase product life cycle for the XRP trust, which potentially implies the possibility of an XRP ETF in the future.
“Each Product is intended to follow a four-stage life cycle — with the ultimate goal of uplisting the product to an ETF,” Grayscale said on a dedicated FAQ page. “As a product progresses through this intended lifecycle, there is a correlated increase in investor access and transparency,” the firm noted.
XRP has an “important real-world use case,” says Grayscale
In the announcement, Grayscale’s head of product and research, Rayhaneh Sharif-Askary, pointed out that the Grayscale XRP Trust gives investors exposure to a protocol “with an important real-world use case.” He added:
“By facilitating cross-border payments that take just seconds to complete, XRP has the potential to transform the legacy financial infrastructure.”
The XRP Ledger is a decentralized, public blockchain led by a global community of businesses and developers. The XRPL is designed to provide a number of use cases, such as cross-border payment solutions, tokenization and decentralized finance.
Grayscale Investments is one of the world’s biggest Bitcoin investment firms, holding 222,300 BTC ($12.8 billion) in its spot BTC ETF, the Grayscale Bitcoin Trust ETF (GBTC).
Since debuting GBTC in January with the other 10 issuers, Grayscale has emerged as one of the biggest sellers of Bitcoin. It has consistently offloaded billions in BTC from the ETF.
After launching two spot Ether ETFs in July, Grayscale has also posted multi-billion outflows from the new products.