Canary Capital has applied with the US Securities and Exchange Commission (SEC) to launch a spot XRP ETF (exchange-traded fund). If approved, the cryptocurrency investment firm will offer investors access to XRP without them having to purchase the asset directly.

XRP ETF prospects continue to increase whilst hopes of a similar financial instrument for Solana continue to dissipate.

Canary Capital Applies For Spot XRP ETF

Based on the filing, the fund will track XRP’s value using the CME CF Ripple dollar reference rate. This is a once-a-day benchmark index price for Ripple. It aggregates trade data from multiple Ripple-USD markets operated by major crypto exchanges. Notably, these exchanges comply with the rigorous regulatory requirements of CF Benchmark.

Canary Capital’s prospective financial instrument would allow institutional and retail investors to invest in XRP via traditional financial (TradFi) markets. At the same time, it would reduce the technicalities of custody, security, and regulation. The firm’s interest in an XRP ETF comes as it sees potential in the crypto market beyond Bitcoin and Ethereum.

“We’re seeing encouraging signs of a more progressive regulatory environment coupled with growing demand from investors for sophisticated access to cryptocurrencies beyond Bitcoin and Ethereum – specifically investors seeking access to enterprise-grade blockchain solutions and their native tokens such as XRP,” a Canary spokesperson said.

Read more: XRP ETF Explained: What It Is and How It Works

Canary Capital is not alone in this vision. As BeInCrypto reported, Bitwise also recently filed for an XRP ETF. The filing, which is publicly available on the Delaware Department of State website, will use the CSC Delaware Trust Company as the registered agent. The agent would provide compliance services for legal and corporate endeavors.

Amidst growing buzz around XRP ETF, coupled with Grayscale’s recent move to launch an XRP Trust, the Ripple community has registered growing interest. This is evident with recent spikes in Weighted Sentiment for the remittance token. It indicates a high volume of positive comments, posts, or messages.

Despite the optimism, however, the path for an XRP ETF is marred with challenges. Among them is the US SEC’s recent move to appeal XRP’s non-security status. This is after Judge Analisa Torres’s landmark that XRP is only a security when sold to institutional investors. Other than this, there is also the futures market consideration for spot ETF approvals.

“To have an XRP spot ETF, there will first need to be a futures ETF. Part of getting the BTC spot ETFs approved was the SEC concluding that the CME bitcoin futures market would suffice to provide surveillance for fraud and manipulation. If XRP gets a futures ETF then it’s a step in the right direction to one day getting a spot,” Fox Business correspondent Eleanor Terrett wrote.

Some experts, however, believe that XRP is not positioned to become the third US crypto ETF. Solana was once considered a strong candidate, but recent developments have significantly reduced its chances in the US market. Several analysts now estimate a near-zero probability of any approvals occurring in 2024. Meanwhile, other international markets are moving ahead with cryptocurrency ETF offerings, outpacing US regulators in this sector. 

Read more: How To Buy XRP and Everything You Need To Know

According to data from BeInCrypto, XRP is currently trading at $0.53, reflecting a modest 0.75% increase in the last 24 hours.