How an Approved XRP ETF Could Reshape Crypto Investment and Cross-Border Transactions

With the approval of Ethereum and Bitcoin exchange-traded funds (ETFs) and the new crypto-friendly administration, asset managers like Grayscale are pushing for XRP ETFs. 

Introduced in 2012, XRP is the native token of the XRP Ledger, Ripple Labs’s open-source blockchain platform. The company developed the token to address the speed and cost inefficiencies of the traditional banking system. 

XRP settles transactions within three to five seconds, and each transaction costs roughly $0.0002, making it faster and cheaper than crypto giants such as Bitcoin and Ethereum.

Here, we look at some of the recent developments in the XRP ETF approval journey and explore what these funds could mean for the crypto market and global transactions.

Will There Be an XRP ETF?

The straightforward answer? Maybe — a strong maybe. 

Thanks to crypto developments in the past year, there’s a lot of hope for an XRP ETF:

• More investors are gaining interest in cryptocurrencies
• Institutions like Grayscale and Franklin Templeton have submitted ETF filings for XRP with the U.S. Securities and Exchange Commission (SEC)
• The SEC has taken a positive stance on digital asset ETFs, approving 11 spot Bitcoin ETFs and eight Ethereum ETFs in 2024 and giving initial approval to Bitwise’s combined BTC and ETH ETF

With SEC Chair Gary Gensler’s resignation and the pending approval of crypto-advocate Paul Atkins as new Chair, the SEC may have an even more positive outlook on crypto ETFs. The new administration could provide regulatory clarity for crypto assets, which would, in turn, improve the likelihood of an XRP ETF approval. 

Experts anticipate the ETF approval in late Q3 or early Q4 of 2025, depending on whether the SEC and Ripple resolve their four-year-long court battle (more on this later).

The Path to an XRP ETF: Recent Developments

If things go well, investors may be able to access XRP ETFs as early as October 2025. Here’s a look at some of the ongoing developments in getting approval for the ETFs:

Grayscale’s XRP Trust Conversion Sparks Momentum

NYSE Arca Inc. made a 19b-4 filing in January 2025 to convert Grayscale’s XRP Trust into a spot ETF. The SEC acknowledged the application in February, starting the journey to a possible XRP ETF approval. 

The SEC has up to 240 days (from the date it published Grayscale’s application in the Federal Register) to review the proposal, meaning the decision deadline is October 18, 2025. If the outcome is favorable, investors could invest in XRP ETFs as early as late this year. 

Grayscale’s move aligns with the broader trend of institutional adoption of crypto ETFs as more asset managers and financial institutions seek to take advantage of President Donald Trump’s and his new administration’s pro-crypto stance. 

Franklin Templeton Joins the XRP ETF Race

Investment giant Franklin Templeton also filed for an XRP ETF following the registration of the Franklin XRP Trust in February. As with the Grayscale application, the SEC is expected to decide on the asset manager’s S-1 filing by the end of October, determining the fate of XRP ETFs in the U.S. market. 

If the fund is approved, Coinbase Custody will act as the custodian, Coinbase will be the primary broker, CSC Delaware Trust Company will be the trustee, and CBOE BZX Exchange will be the trading platform. 

Franklin’s XRP Trust filing signals increasing investor demand for exposure to XRP and cryptocurrencies in general, which could drive even more institutional adoption of crypto assets. 

SEC Acknowledges Multiple XRP ETF Applications

The SEC no doubt has its work cut out this year. It has acknowledged XRP ETF applications from Bitwise, Canary Capital, 21Shares, CoinShares, and WisdomTree, officially starting the funds’ review processes.

The acknowledgment triggered a 21-day public comment period within which stakeholders can show their support or express concerns for the XRP ETFs. After this period, the SEC will formally begin the review process, which can take up to 240 days from the date of acknowledging the filings. 

Analysts like Bloomberg’s James Seyffart have expressed optimism about ETF approvals in 2025. However, this may depend on the outcome of the ongoing battle between the SEC and Ripple Labs. 

How Changing Regulatory Leadership Could Influence Approval

The departure of former Chair Gary Gensler from the SEC will undoubtedly have a significant impact on the approval of XRP ETFs and other crypto ETFs. Under the former Chair, the SEC was regarded as a “crypto nemesis,” taking a litigious stand against crypto issuers instead of providing regulatory clarity. 

While the SEC did approve Bitcoin ETFs in early 2024, many crypto advocates, including Ripple CEO Brad Garlinghouse, believe it took too long. Further, the approval only came after the District of Columbia Court of Appeals ruled that the SEC was wrong to reject Grayscale’s Bitcoin ETF proposal. This and the SEC’s legal battle with Ripple Labs highlight the regulator’s stand on digital assets under its previous leadership. 

However, the relationship between the SEC and crypto could improve under the leadership of crypto-friendly Acting Chairman Mark T. Uyeda and Appointed Chair (pending confirmation) Paul Atkins. 

Crypto enthusiasts expect the new leadership to provide more regulatory clarity — already in the works through the new Crypto Task Force — for crypto assets. This may streamline the path to XRP ETF approval for asset managers like Franklin Templeton, Bitwise, and WisdomTree, who are all vying for the first approved XRP ETF.

If approved, this will be a significant win for altcoin ETFs, encouraging more retail and institutional investors to look beyond Bitcoin and Ethereum when creating new financial products. 

Ripple vs. SEC: The Legal Battle That Could Determine XRP’s ETF Fate

The core issue in the ongoing Ripple vs. SEC lawsuit is whether XRP falls under the “security” or “commodity” category. The SEC filed the lawsuit in 2020, accusing Ripple of raising $1.3 billion by selling unregistered XRP securities. 

Ripple argued that XRP isn’t a security — it’s a digital currency, and the company, therefore, didn’t have to register with the SEC. 

Judge Analisa Torres ruled in favor of Ripple in 2023, arguing that XRP sales to investors on exchanges didn’t qualify as securities transactions and that XRP itself wasn’t a security. 

Following the ruling, the SEC filed an appeal, arguing that the decision contradicted decades of Supreme Court precedent and securities law. 

The ruling in the appeal will likely play a key role in the journey to XRP ETFs. If Ripple Labs wins and XRP is deemed a commodity, it’ll be treated like giants such as Bitcoin and Ethereum, which have already gotten ETF approvals. This could expedite the approval process for asset managers like Franklin Templeton and Bitwise. 

A win for Ripple could also increase XRP’s demand and liquidity, making the crypto asset and its ETFs more attractive to institutional investors. 

If the court classifies XRP as a security, firms looking to launch XRP ETFs would have to navigate stricter regulatory frameworks, some U.S.-based exchanges could de-list XRP, and some institutional investors would be hesitant to back XRP-based products because of compliance risks.

However, it’s unlikely that there will be a ruling against Ripple because:

• There are speculations that the SEC may classify XRP as a commodity in its recent settlement talks with Ripple. 
• The agency may withdraw the appeal — it has already withdrawn enforcement actions against Coinbase Inc. and Coinbase Global Inc.
• The current administration is pro-crypto and may push for a positive resolution.

However, crypto enthusiasts and analysts can only speculate, pending moves from the SEC, Ripple, or the appeals court. 

How an XRP ETF Could Reshape Crypto

If approved, an XRP ETF could significantly impact the crypto industry. Here are some notable ways it could do so: 

Increased Institutional Adoption

As with Bitcoin and Bitcoin ETFs or Ethereum and Ethereum ETFs, XRP ETFs would expose investors to XRP without directly holding the asset, eliminating custody concerns. This could capture the attention of hedge funds, pension funds, and risk-averse retail investors. 

Greater Liquidity and Price Stability

An XRP ETF approval could increase interest in the XRP ecosystem, boosting the token’s trading volume. This can, in turn, increase market liquidity, making it easier for investors and traders to buy and sell their XRP tokens. 

It can also increase XRP’s price stability, making the cryptocurrency an attractive option for even more institutional investors. More liquidity typically translates to better price stability, as the market can handle asset demand and supply without making significant price movements. 

Regulatory Clarity and Market Confidence

As of now, it’s unclear whether XRP is a security or a commodity. An ETF approval by the SEC would signal the asset is a commodity, providing more clarity for institutional investors. This could increase their confidence in the XRP market, driving more investments. 

An XRP ETF approval could also set a precedent for other cryptocurrencies, like Solana (SOL), potentially paving the way for more altcoin-based ETFs.

Portfolio Diversification Benefits

An XRP ETF could help investors already holding Bitcoin and Ethereum ETFs, traditional assets like company shares, and direct cryptocurrencies diversify their portfolios. XRP ETFs can help hedge against the risks associated with these assets, minimizing investors’ losses if either were to drop in value. 

Impact on Cross-Border Transactions and Global Finance

Ripple initially developed XRP to streamline cross-border payments. So, an ETF approval will undoubtedly impact cross-border transactions and global finance. Here’s how:

Lower Costs for International Transfers

An XRP ETF approval could provide greater regulatory clarity for XRP, resulting in greater adoption among banks and businesses. This could see cross-border transactions become even cheaper (compared to traditional financial systems), providing a better environment for global finance. 

Faster Settlement Times

XRP’s blockchain facilitates near-instantaneous transactions, making the token faster than most cryptocurrencies. 

If more banks and businesses integrate the token into their systems (thanks to the XRP ETF), international transactions, remittances, and global finance would become more efficient. 

Increased Trust in Digital Payments

As mentioned, an XRP ETF approval could provide greater regulatory clarity for the underlying asset. This can boost confidence in XRP-based financial services, encouraging more merchants and individuals to adopt cryptocurrency as a digital payment solution. 

Stay at the Forefront of Institutional Crypto Adoption With AlphaPoint

There’s a growing interest in XRP, with asset managers like Grayscale and Franklin Templeton submitting applications for XRP ETFs with the SEC. If approved, the ETFs will boost the asset’s liquidity. This will help bring more regulatory clarity to the XRP market and the broader crypto industry, driving further retail and institutional adoption. 

With AlphaPoint, you can become part of the XRP movement in time for the expected ETF approvals. We offer white-label technology, eliminating the need for months or years of infrastructure development — your crypto exchange or payment solution will be ready to go to market in weeks!

Want to take advantage of the possible XRP ETF approval? Schedule a demo with AlphaPoint today to learn how we can help you!