NYSE Arca Officially Proposes a Rule Change for Grayscale XRP Trust Spot ETF

In a recent tweet, crypto advocate Max Avery shared that NYSE Arca has officially proposed a rule change to allow the Grayscale XRP Trust to be converted into a spot exchange-traded fund (ETF).

This development represents a significant step toward broader institutional and retail adoption of XRP within the U.S. financial markets.

NYSE Arca has officially proposed a rule change for a Grayscale #XRP Trust spot ETF – Here's everything you need to know… 
1/21🧵 pic.twitter.com/ybV0eqlJ5O

— Max Avery (@realMaxAvery) February 14, 2025

Overview of the Filing

The Grayscale XRP Trust manages $16.1 billion in XRP assets. It enables U.S. investors to gain exposure to XRP without holding the digital asset directly. If approved, the trust’s conversion into an ETF would increase accessibility for a broader range of investors by allowing shares to be traded on NYSE Arca, one of the largest U.S. exchanges.

Custody, Security, and Pricing Mechanism

To ensure price integrity, the ETF would use a pricing mechanism provided by CoinDesk Indices, which aggregates data from leading cryptocurrency exchanges, including Coinbase, Kraken, and Bitstamp. This structure aims to prevent market manipulation and maintain transparency in XRP price discovery.

All XRP assets will be held in cold storage by Coinbase Custody Trust Company, which provides multi-layered security. The private keys will be stored in geographically distributed secure vaults to mitigate risks associated with centralized storage.

Creation and Redemption Mechanism

The proposed ETF will operate with a cash-based creation and redemption process. This means that authorized participants will transact in cash rather than directly handling XRP , ensuring compliance with existing regulatory frameworks. The minimum basket size for creation and redemption will be 10,000 shares, allowing for efficient trading operations.

Market Transparency and Regulatory Compliance

To maintain fair and efficient trading, NYSE Arca will provide intraday indicative value (IIV) updates every 15 seconds during market hours, ensuring that investors receive real-time information on the ETF’s value.

The trading hours for the proposed XRP spot ETF will be 4:00 AM to 8:00 PM ET, which extends beyond traditional market hours and offers investors greater flexibility. NYSE Arca will actively monitor trading activity and has the authority to halt trading in cases of significant market disruptions or irregularities in price data.

Additionally, all transactions will be subject to surveillance by NYSE Arca and the Financial Industry Regulatory Authority (FINRA) to detect any potential market manipulation or violations.

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Investor Protections and Institutional-Grade Infrastructure

To ensure transparency and investor protection, the net asset value (NAV) of the ETF will be calculated daily and made available to all market participants simultaneously. The trust will not actively manage XRP holdings; instead, it is structured to track the price of XRP minus fees and expenses.

Institutional support for the ETF includes Delaware Trust Company as the trustee and BNY Mellon as the transfer agent, reinforcing institutional-grade infrastructure in XRP investing.

Regulatory Timeline and Market Implications

The U.S. Securities and Exchange Commission (SEC) has 45 days to decide on the filing, with the possibility of extending the review period up to 90 days. Once the proposal is published in the Federal Register, a public comment period will begin, allowing interested parties to submit their opinions to the SEC.

If approved, the Grayscale XRP Trust Spot ETF would mark a major milestone for XRP adoption in traditional financial markets. The transition to an ETF structure would reduce fees—currently set at 2.5%—which may decrease further upon conversion. Additionally, marketmakers will be required to implement policies preventing the misuse of non-public information related to the ETF.

Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.

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