Franklin Templeton seeks SEC approval for spot XRP ETF in latest crypto initiative

In order to introduce the Franklin XRP ETF, a spot exchange-traded fund intended to follow the price of the cryptocurrency XRP, Franklin Templeton submitted a Form S-1 to the U.S. Securities and Exchange Commission (SEC) on March 11, 2025.

Franklin Templeton files to launch XRP ETF, leveraging Coinbase custody and Cboe listing

In reality, the proposed Franklin XRP ETF, which was created on February 28, 2025, and is structured under the Delaware-based Franklin XRP Trust, will contain XRP tokens that are custodially held by Coinbase Custody Trust Company, LLC, with cash managed by State Street Bank and Trust Co. Investors will be able to learn more about XRP without actually handling the cryptocurrency thanks to the shares' trading on the Cboe BZX exchange.

In large blocks, authorized participants—including licensed broker-dealers—can create or redeem shares using XRP or cash; participants are responsible for paying transaction fees. Every day, the CF Benchmarks Index—which compiles information from significant exchanges like Coinbase, Bitstamp, Kraken, and LMAX Digital—will be used to determine the fund's net asset value (NAV).

According to the filing, an intraday indicator value will be updated every 15 seconds during market hours to provide a real-time price forecast. In 2024, Coinbase handled between 58% and 61% of the index's trading activity, according to the SEC filing, underscoring its importance in pricing calculations. Although the precise proportion has been omitted, Franklin Templeton will accept an annually sponsor fee.

Up to a certain amount, the charge covers standard expenditures such as custody, administration, and legal fees. The fund would cover extraordinary costs like legal action or fines from the government, which would necessitate selling XRP and result in taxable events for shareholders. The submission comes after the SEC's long-running litigation against Ripple Labs was settled with a court judgment that XRP is not a security when sold on exchanges.

Risks include market volatility, legal changes, and operational difficulties related to XRP's blockchain governance, even with this clarity. However, the major Wall Street players believe the rulebook has been abandoned under the Trump administration. The nature of the ETF prevents it from holding cryptocurrency assets other than XRP without specific regulatory license.

the Franklin XRP ETF might increase mainstream investors' access

Having applied for a Solana ETF and introduced the first spot bitcoin (BTC) and ethereum (ETH) funds, Franklin Templeton has been aggressively expanding into cryptocurrency ETFs at the same time as this move. Similar XRP ETF filings are still waiting from rivals like Grayscale and 21Shares, indicating rising institutional demand.

If authorized, the Franklin XRP ETF might increase mainstream investors' access to XRP while utilizing conventional brokerage channels and lowering the technical obstacles related to direct cryptocurrency ownership. The SEC's ruling may indicate that regulators' stance on financial products based on cryptocurrency is shifting. Share, upvote and comments are appreciated please go for it.

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