Canary Capital has filed with the U.S. Securities and Exchange Commission (SEC) to launch a spot XRP ETF (exchange-traded fund). If approved, the investment firm will offer investors access to XRP without having to purchase the asset directly.

The prospects for an XRP ETF continue to rise, while hopes for a similar financial instrument for Solana continue to fade.

How Canary’s XRP ETF Should Work

Based on the record, the fund will track the value of XRP using the CME CF Ripple Dollar Benchmark Rate. This is a daily reference price index for Ripple. It aggregates trading data from multiple Ripple-USD markets operated by major crypto exchanges. Furthermore, these exchanges meet CF Benchmark’s stringent regulatory requirements.

Canary Capital’s prospective financial instrument would allow institutional and retail investors to invest in XRP through traditional financial markets (TradFi), while reducing the technicalities of custody, security, and regulation. The firm’s interest in an XRP ETF comes as it sees potential in the crypto market beyond Bitcoin and Ethereum.

“We are seeing encouraging signs of a more progressive regulatory environment, coupled with growing investor demand for sophisticated access to cryptocurrencies beyond Bitcoin and Ethereum – specifically investors seeking access to enterprise-grade blockchain solutions and their native tokens, such as XRP,” a Canary spokesperson said.

Read more: What is a Bitcoin ETF? Understand

Canary Capital is not alone in this view. As reported by BeInCrypto, Bitwise also recently filed for an XRP ETF. The filing, which is publicly available on the Delaware Department of State website, will use CSC Delaware Trust Company as the registered agent. The agent would provide compliance services for legal and corporate ventures.

Amid the growing buzz around the XRP ETF, coupled with Grayscale’s recent move to launch an XRP Trust, the Ripple community has seen a surge in interest. This is evident from the recent spikes in the Weighted Sentiment for the remittance token. It indicates a high volume of positive comments, posts, or messages.

Challenges on the path to approval

Despite the optimism, however, the road to an XRP ETF is fraught with challenges. Among them is the recent move by the US SEC to appeal XRP’s non-security status. This comes after Judge Analisa Torres’ landmark ruling that XRP is only a security when sold to institutional investors. In addition, there is also the consideration of the futures market for spot ETF approvals.

“To have an XRP spot ETF, you’ll first need a futures ETF. Part of the approval of BTC spot ETFs was the SEC concluding that the CME bitcoin futures market would be sufficient to provide oversight against fraud and manipulation. If XRP gets a futures ETF, then it’s a step in the right direction toward one day getting a spot ETF,” wrote Fox Business correspondent Eleanor Terrett.

Some experts, however, believe that XRP is not positioned to become the third U.S. crypto ETF. Solana was once considered a strong candidate, but recent developments have significantly reduced its chances.

Several analysts now estimate a near-zero probability of any approvals occurring in 2024. Meanwhile, other international markets are moving forward with cryptocurrency ETF offerings, beating US regulators to the punch in this space.

Read more: Ripple (XRP) Price Prediction 2021/2025

XRP Price Performance. Source: BeInCrypto

According to data from BeInCrypto, XRP is currently trading at $0.53, reflecting a modest 0.75% increase over the past 24 hours.

The article SEC Receives New Application for XRP ETF appeared first on BeInCrypto.