The U.S. Securities and Exchange Commission (SEC) must now issue a final decision on the approval of an XRP exchange-traded fund (ETF) within 240 days. This follows the official publication of 19b-4 filings for two proposed XRP-based investment products in the Federal Register.
Understanding the XRP ETF Timeline
On February 20, the NYSE Arca’s filing to list and trade shares of the Grayscale XRP Trust was officially published. A day later, on February 21, Cboe BZX Exchange’s filing for the 21Shares Core XRP Trust was also posted. These publications trigger a formal 240-day review window, setting final deadlines of October 18 and October 19, 2025, respectively.
This means the SEC must make a final determination—either approval, denial, or in some cases, an extension—by these dates. The regulatory body had previously acknowledged these filings, but the Federal Register notice formally starts the clock on the decision-making process.
Several other asset managers, including Bitwise, WisdomTree, and Canary Funds, have similar applications awaiting registration. The progression of the 21Shares and Grayscale proposals suggests that filings from other issuers may soon enter the same formal review phase.
Market Potential for an XRP ETF
Currently, U.S. investors only have access to spot Bitcoin and Ethereum ETFs. While Bitcoin ETFs saw massive inflows, Ethereum-based products experienced comparatively modest demand. This raises valid questions about how an XRP ETF might perform.
Matt Hougan, Chief Investment Officer at Bitwise, expressed strong optimism regarding market interest. He emphasized that XRP has cultivated a dedicated community over many years and is already widely traded on major centralized exchanges. Hougan also noted that investors are seeking simple, cost-efficient ways to gain exposure to the asset.
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Beyond market demand, regulatory attitudes may be shifting. Hougan observed that under the new administration, the SEC appears more open to engaging in dialogue about new products, including those involving assets like XRP. This marks a change from previous years when discussions about staking or in-kind creations were often cut short.
Prediction markets reflect this growing optimism. One major platform currently indicates an 81% probability that an XRP ETF will gain approval before the end of 2025.
Frequently Asked Questions
What is an XRP ETF?
An XRP ETF is a type of exchange-traded fund that would track the price of XRP. It would allow investors to buy and sell shares through traditional brokerage accounts without needing to hold the cryptocurrency directly, simplifying access and offering regulatory safeguards.
Why is the 240-day deadline important?
The publication of the 19b-4 filings in the Federal Register initiates a legally defined review period for the SEC. The 240-day mark represents the maximum timeframe the agency has to issue a final decision, bringing much-needed clarity and a firm deadline to the process.
How does the XRP ETF approval process work?
The process requires the SEC to review 19b-4 filings from exchanges seeking to list the ETF and S-1 registration statements from the issuers themselves. Both need approval before the product can launch. The current 240-day clock specifically pertains to the exchange rule change filings.
What factors will the SEC consider?
The regulator will likely evaluate market manipulation risks, custody solutions for the underlying XRP, investor protection measures, and overall market demand. Its perspective on whether XRP is a security will also be a critical factor in the final decision.
Could the SEC delay its decision?
Yes, the SEC can extend the review period by issuing delays and requesting additional public comment. However, the 240-day deadline represents the ultimate end of the process, by which time a final approve-or-deny verdict must be given.
How can investors stay updated on the approval process?
Investors can monitor official SEC announcements and notices published in the Federal Register. Reputable financial news sources that cover regulatory developments in the digital asset space are also a valuable resource for timely updates.