Franklin Templeton filed a Form S-1 with the U.S. Securities and Exchange Commission (SEC) on March 11, 2025, to launch the Franklin XRP ETF, a spot exchange-traded fund designed to track the price of the cryptocurrency XRP.

Franklin Templeton Files to Launch XRP ETF, Leveraging Coinbase Custody and Cboe Listing

The proposed Franklin XRP ETF, structured under the Delaware-based Franklin XRP Trust formed Feb. 28, 2025, would hold actual XRP tokens stored by Coinbase Custody Trust Company, LLC, with cash managed by State Street Bank and Trust Company. Shares will trade on the Cboe BZX Exchange, enabling investors to gain exposure to XRP without directly handling the cryptocurrency.

Authorized participants, including registered broker-dealers, can create or redeem shares in large blocks using XRP or cash, with transaction fees absorbed by participants. The fund’s net asset value (NAV) will be calculated daily using the CF Benchmarks Index, which aggregates data from major exchanges like Coinbase, Bitstamp, Kraken, and LMAX Digital.

The filing notes that an intraday indicative value, updated every 15 seconds during market hours, will provide real-time price estimates. The SEC filing notes that Coinbase accounted for 58% to 61% of the index’s trading volume in 2024, underscoring its dominance in pricing calculations. Franklin Templeton will charge an annualized sponsor’s fee, though the exact percentage remains redacted.

The fee covers ordinary expenses, including custody, administration, and legal costs up to a specified threshold. Extraordinary expenses, such as litigation or regulatory penalties, would be borne by the fund, potentially requiring XRP sales that trigger taxable events for shareholders. The filing follows a court ruling that XRP is not a security when sold on exchanges, resolving a longstanding SEC lawsuit against Ripple Labs.

Despite this clarity, risks include regulatory shifts, market volatility, and operational challenges tied to XRP’s blockchain governance. With the Trump administration, however, Wall Street’s heavyweights are betting the rulebook has been tossed out the window. The ETF’s structure avoids holding non-XRP crypto assets without explicit regulatory approval.

This move aligns with Franklin Templeton’s aggressive expansion into cryptocurrency ETFs, having previously launched spot bitcoin (BTC) and ethereum (ETH) funds and filed for a Solana ETF. Competitors like Grayscale and 21shares have similar XRP ETF applications pending, reflecting heightened institutional demand.

If approved, the Franklin XRP ETF could broaden mainstream investor access to XRP, leveraging traditional brokerage channels and mitigating technical barriers associated with direct crypto ownership. The SEC’s decision could signal regulators’ evolving stance on crypto-based financial products.