Purpose Investments files preliminary prospectus for an XRP ETF, aiming to become 'world’s first'

Asset manager Purpose Investments has filed a preliminary prospectus with Canadian securities regulators for the proposed launch of the Purpose Ripple (XRP) exchange-traded fund.

Purpose was the first to issue spot Bitcoin and Ethereum ETFs, which launched on the Toronto Stock Exchange in February and April 2021, respectively. While XRP exchange-traded products (ETPs) are already available globally, the firm hopes to follow its Bitcoin and Ethereum accolades by offering the world’s first spot XRP ETF, according to a statement on Thursday. 

The ETF seeks to invest substantially all of its assets in long-term holdings of XRP and to provide holders of the ETF units with the opportunity for long-term capital appreciation, Purpose stated.

"At Purpose, we remain steadfast in our commitment to innovation and to bridging the gap between traditional and decentralized finance," Purpose Investments founder and CEO Som Seif said. "As XRP sees increasing adoption and institutional interest, we believe an ETF can offer investors a transparent and familiar way to access it within a regulated framework."

US vs. Canada

Various asset management firms have also filed applications with the U.S. Securities and Exchange Commission to launch spot XRP ETFs, pending regulatory review. Notably, Grayscale has applied to convert its existing XRP Trust into a spot XRP ETF, while Bitwise , Canary Capital , WisdomTree and 21Shares , have also submitted proposals. Several other applications for Solana and Litecoin ETFs have also been filed in the U.S.

While the U.S.-based funds were the first to file, Canada’s regulator generally approves ETFs more quickly than its U.S. counterpart, especially for cryptocurrency ETFs with a more flexible and established regulatory pathway, helping to fuel Purpose’s aim. That said, under the new pro-crypto Trump administration and likely confirmed crypto-friendly SEC Chair Paul Atkins, the approval process for U.S. crypto ETFs could move faster than its more hostile approach to the industry previously.

21Shares already offers an XRP ETP (AXRP) that trades on various European exchanges. Bitwise also provides a European XRP ETP (GXRP), offering exposure to XRP with secure custody solutions. Due to regulatory differences, crypto investment vehicles in Europe are typically structured as ETPs instead of ETFs. While ETFs are fully backed and must meet diversification rules, ETPs may track a single asset and can be either physically backed or structured as unsecured debt obligations.

“This launch represents another important step in our efforts to be the leading and most trusted partner for investors in harnessing the benefits of crypto and digital assets by enabling them to understand, access, and confidently invest these assets,” Purpose Chief Innovation Officer Vlad Tasevski added. "We remain committed to providing exposure to transformative digital assets and blockchain technologies through regulated investment vehicles."