SEC Extends XRP ETF Review Period to May 2025, Franklin Templeton Enters Race

The U.S. Securities and Exchange Commission (SEC) has extended the review period for several XRP exchange-traded fund (ETF) proposals, including those from 21Shares, Canary Capital, and Grayscale. This decision comes as Franklin Templeton, a prominent asset manager, has entered the race to launch an XRP ETF in the U.S. The SEC initially recognized Grayscale's application last month, starting a 45-day review period that can be extended up to 240 days. The new deadline for these ETF proposals is now set for May 22, 2025, affecting the Canary Spot XRP ETF, Bitwise's Spot XRP ETF, and the Grayscale Spot XRP ETF.

The SEC's decision to extend the review period is not uncommon, as the regulator often requires more time to thoroughly evaluate complex filings. This extension allows the SEC to conduct a more comprehensive review of the proposed ETFs, ensuring that they meet all regulatory requirements before approval. The delay also reflects the SEC's cautious approach to approving new cryptocurrency-related financial products, given the regulatory uncertainty surrounding digital assets.

Franklin Templeton's entry into the XRP ETF race adds significant momentum to the institutional adoption of XRP. As an asset manager with a substantial portfolio, Franklin Templeton's involvement signals growing interest from traditional financial institutions in the cryptocurrency market. This development could potentially accelerate the acceptance and integration of XRP into mainstream financial services, further legitimizing its role in the digital asset ecosystem.

The SEC's decision to delay the approval of XRP ETFs is part of a broader trend of regulatory scrutiny over cryptocurrency-related financial products. The regulator has been cautious in approving new ETFs, citing the need for more time to review filings and ensure compliance with existing regulations. This approach is aimed at protecting investors from potential risks associated with volatile and unregulated markets.

The extension of the review period for XRP ETFs is a significant development in the cryptocurrency market, as it highlights the ongoing regulatory challenges faced by digital asset companies. While the delay may be seen as a setback for proponents of XRP, it also underscores the importance of regulatory compliance and investor protection in the rapidly evolving world of digital assets. As the SEC continues to evaluate these proposals, the outcome will have far-reaching implications for the future of XRP and the broader cryptocurrency market.

Several other financial firms have also filed XRP ETF applications. These applications are part of a broader trend where major issuers are submitting ETF applications to meet growing demand for digital asset investments packaged in traditional financial products. This surge follows the successful launch of spot Bitcoin ETFs, which have become a rapidly growing category in ETF history.

Ripple Labs CEO Brad Garlinghouse previously called the approval of an XRP ETF in the U.S. “inevitable.” He cited strong demand from both institutional and retail investors. The regulatory status of XRP had been challenged under former SEC Chair Gary Gensler, who pursued a lawsuit against Ripple Labs over XRP sales. Despite this, the SEC has been scaling back similar high-profile actions against exchanges.

Franklin Templeton’s filing is preliminary. The SEC has up to 240 days to approve or deny it, which could push the decision to late 2025. The proposed ETF aims to track the spot price of XRP minus fees, with assets held via Coinbase Custody. Shares of the proposed ETF would trade on the Cboe BZX Exchange, and authorized participants would create or redeem shares in blocks using cash, which would be converted to XRP through a third party. Shareholders would not benefit from XRP Ledger forks or airdrops, a key detail in the filing.