Franklin Templeton Files for XRP ETF, Expanding Crypto Offerings

Franklin Templeton has taken a significant step towards expanding its cryptocurrency offerings by filing an S-1 registration form with the U.S. Securities and Exchange Commission (SEC) for an XRP exchange-traded fund (ETF). This move comes as the asset management firm seeks to provide investors with exposure to XRP, the fourth largest cryptocurrency by market capitalization.

The proposed ETF, which is set to trade on the CBOE BZX Exchange, will be managed by Franklin Templeton and will utilize the CME CF XRP-Dollar Reference Rate to determine its net asset value. Coinbase Custody will serve as the custodian for the fund’s XRP holdings, while Coinbase will act as the prime broker. CSC Delaware Trust Company will be the trustee for the fund.

The shares of the ETF will be offered continuously at net asset value, with only authorized participants able to create or redeem creation units. This structure is designed to ensure that the ETF remains closely aligned with the value of XRP, providing investors with a reliable and transparent investment vehicle.

Franklin Holdings, a subsidiary of Franklin Templeton, will sponsor the fund and has agreed to cover most of the ordinary operating expenses in exchange for a sponsor’s fee. The trust is structured as an emerging growth company under the JOBS Act, which provides certain regulatory benefits and exemptions for newly formed companies.

The filing highlights several risks associated with investing in the XRP ETF, including the price volatility of XRP, regulatory uncertainty, potential security breaches, and complexities related to tax treatment. The fund will not acquire any forked assets or “incidental rights” from the XRP blockchain, ensuring that investors are solely exposed to the value of XRP.

This development marks a significant milestone for Franklin Templeton, as it continues to expand its presence in the cryptocurrency market. The launch of an XRP ETF would provide investors with a new way to gain exposure to one of the largest and most widely used cryptocurrencies, while also benefiting from the expertise and experience of one of the world's leading asset management firms.