Bitwise Files Application for XRP Exchange-Traded Fund (ETF) in Delaware

Ripple's native token has trimmed some of its losses after US asset manager Bitwise filed an application for an XRP exchange-traded fund (ETF) in the

US asset manager Bitwise has filed an application for an XRP exchange-traded fund (ETF) in the State of Delaware, according to a recent filing.

The filing, which was submitted on March 1, 2024, lists the Bitwise XRP ETF as incorporated on September 30, 2024, with CSC Delaware Trust Company as the registered agent.

The application, which is now available on the Delaware Department of State Division of Corporations website, provides further details on the ETF.

However, the filing does not indicate an imminent submission to the U.S. Securities and Exchange Commission (SEC) for approval of the XRP ETF.

The registration of the ETF could still take several months before reaching the formal SEC approval stages.

This filing comes amidst rumors and anticipation among the XRP community regarding the potential launch of an XRP ETF.

Earlier this year, a false filing for a “BlackRock iShares XRP Trust” emerged in November 2023, which led to a temporary boost in XRP's price before being debunked.

Meanwhile, in recent months, several Bitcoin and Ether ETFs have been approved by the SEC, and institutional investors are now seeking exposure to XRP through a regulated product.

If approved, the XRP ETF would offer institutional investors a regulated avenue to gain exposure to the cryptocurrency.

The application also comes amid ongoing legal battles between the SEC and Ripple Labs. In 2020, the SEC sued Ripple, alleging that its sale of XRP was an unregistered securities offering.

While a July 2023 ruling provided Ripple a partial victory, declaring XRP is not a security when traded on public exchanges, institutional sales of the token could still fall under securities regulations.

In the past 24 hours, XRP has seen a 4% decline in price, likely due to concerns around a potential SEC appeal against Ripple, which could delay or impact the approval of XRP ETFs or other applications.

Despite Ripple's strong performance earlier this year, with a 20% year-to-date gain, the scheduled release of 1 billion tokens is adding slight downward pressure on XRP's price.

The news comes nearly seven months after UK-based asset manager, Jupiter Asset Management decided to pull out its investment from an XRP exchange-traded product (ETP) managed by 21Shares, due to compliance concerns.

The Jupiter XRP ETP, which was launched in March 2023, aimed to track the performance of XRP. However, Jupiter Asset Management later decided to withdraw from the product over regulatory and legal risks.

In related developments, Ripple CEO also said in September that the company is “very close” to launching its U.S. dollar-pegged stablecoin.

Speaking during an interview at the SALT Conference in Las Vegas, Ripple CEO Brad Garlinghouse provided an update on the company's stablecoin project, which is known as RLUSD.

“We're very close on the stablecoin. It's currently in a private beta and will go live within weeks, not months. We're also very excited about that,” Garlinghouse said.

According to the CEO, the first tests of the stablecoin have already been carried out on the XRP Ledger (XRPL) and Ethereum mainnets.

Following the initial launch on XRP Ledger and Ethereum, Ripple also plans to deploy this fiat-backed token on additional blockchain networks in the future.

“We're also deploying it on other ledgers over time. We're starting with XRPL and Ethereum, and then we'll go from there,” he added.

The decision to develop a stablecoin came after the depegging of USDC 18 months ago, Garlinghouse explained, noting that Ripple saw an opportunity for a credible player to enter the stablecoin market, which is currently dominated by USDT and USDC.

“When USDC depogged 18 months ago, we saw an opening for a credible player in the stablecoin market, which is currently dominated by USDT and USDC. And so, we're deploying RLUSD, which will be overcollateralized.”

The stablecoin will be overcollateralized, with each unit backed 1:1 by USD reserves or short-term cash equivalents in a bank. To ensure transparency, the firm promised third-party audits and monthly reports on the reserves.

“Each unit of RLUSD will be backed 1:1 by USD reserves, which will be held in a bank. We'll also have third-party audits and monthly reports on the reserves,” Garlinghouse stated.

Ripple also confirmed its ongoing commitment to both XRP and RLUSD, dismissing rumors that it might shift focus away from XRP.

“We're continuing to build out XRP and support the community, while also launching RLUSD. There were rumors that we might pivot away from XRP, but we're fully committed to both,” he concluded.