XRP is on the cusp of breaking into traditional financial markets, with a new development set to enable accredited US investors to purchase the cryptocurrency through depository receipts. As reported by Fox Business, Eleanor Terrett revealed that RDC and Digital Wealth Partners are teaming up to offer XRP depository receipts, providing a gateway for institutional investors and high-net-worth individuals to tap into the asset without having to interact with cryptocurrency exchanges directly.
XRP depository receipts offer investors an indirect stake in the underlying asset, similar to how American Depository Receipts (ADRs) allow ownership of foreign company shares without trading on global markets. By using XRP DRs, individuals can access the cryptocurrency market in a structured manner that aligns with regulatory requirements.
Anchorage Digital, a federally chartered bank overseen by the OCC, will be responsible for safeguarding the depository receipts to uphold security and regulatory supervision. This effort demonstrates the increasing movement toward merging digital assets with conventional financial systems, establishing a compliant and more available route for institutional involvement in the cryptocurrency industry.
Recent Advances in Regulations and Market Trends
Ripple is said to be nearing a major breakthrough with the New York Department of Financial Services (NYDFS), which may soon greenlight its new stablecoin, RLUSD, as well as depository receipts. According to a recent report by Fox Business, regulatory clearance is expected to be granted soon, which would be a landmark achievement for Ripple, cementing its token’s position within the digital asset landscape.
In the past few months, the asset has shown impressive performance in the market. Over the Thanksgiving weekend, XRP saw a 20% price hike, contributing to a significant 200% rise since October. Consequently, the asset continues to hold its rank as the fifth-largest cryptocurrency based on market capitalization, valued at around $108 billion.
Exchange-Traded Funds Experience Growing Popularity as Institutional Investors Take Notice
In addition to depository receipts, the drive to establish XRP exchange-traded funds (ETFs) in the U.S. is gathering pace. The Chicago Board Options Exchange (CBOE) has filed multiple 19b-4 applications on behalf of asset management firms Bitwise and Canary Capital, a significant milestone in the regulatory clearance process. The Securities and Exchange Commission (SEC) after which it has a 240-day window to render a decision.
In October 2024, Bitwise and Canary Capital were at the forefront of companies seeking regulatory approval for an XRP exchange-traded fund (ETF), with Grayscale, a leading cryptocurrency asset manager, later submitting an application to transform its existing XRP Trust into an ETF. Although the Securities and Exchange Commission (SEC) has given the green light to similar proposals in the past, it has yet to respond to these recent submissions, leaving investors in limbo as they await a clear decision on the viability of XRP ETFs.
Investors can now consider depository receipts as an alternative investment option for XRP, with the potential for its influence in financial markets to increase pending regulatory approval. The rising popularity of ETFs indicates a growing demand from institutional investors. These advancements imply that the token is increasingly being incorporated into conventional investment spheres, with its trajectory determined by regulatory actions.
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