Ripple is about to give qualified investors a new way to get their hands on XRP without ever logging into a crypto exchange. According to Fox Business journalist Eleanor Terrett, the company plans to launch XRP depository receipts (DRs) through Receipts Depositary Corporation (RDC) and Digital Wealth Partners (DWP).
These DRs will represent ownership of actual XRP held in custody at Anchorage, a federally regulated bank overseen by the US Office of the Comptroller of the Currency (OCC).
“The XRP DR represents ownership of the underlying $XRP without investors having to buy the asset directly via a crypto exchange,” Eleanor said on X, formerly Twitter. Think of it as a clever bridge between TradFi and DeFi.
Ripple taps Anchorage and TradFi structures to lure institutional money
With the DRs, investors won’t hold XRP directly, but they’ll benefit from its price movements—just like they would with exchange-traded funds (ETFs). The key difference is that DR holders technically own the underlying XRP through a custodial setup, as explained in the announcement from DWP.
The SEC determines whether a product like XRP DRs qualifies as a security using the infamous Howey Test, which measures whether an asset meets the definition of an investment contract.
Ripple will need to file Form S-1 registration statements with the SEC. These filings must include detailed information about custody, market surveillance, and risk disclosures. They’ll need to prove that Anchorage can securely hold XRP and that investors are protected against market manipulation. The SEC will also want to know how Ripple plans to monitor XRP’s price swings and mitigate technical risks tied to its blockchain.
Approval won’t be instant. The SEC’s internal review involves enforcement staff and commissioners who vote on whether the application should pass. The current SEC split is 3-2, but with the acting chairman, the president’s chair nominee, and commissioner Hester Peirce all being pro-crypto, there’s a lot of hope.
On February 6, the Chicago Board Options Exchange (CBOE) filed 19b-4 forms with the Securities and Exchange Commission (SEC) for ETF issuers Bitwise, WisdomTree, 21Shares, and Canary Funds, as Cryptopolitan reported. The 19b-4 forms officially kick off the SEC’s 240-day countdown to either approve or reject them, which will be on October 4.
XRP’s ETF path got its boost from a key ruling in July 2023. Judge Analisa Torres ruled that XRP wasn’t a security when sold on secondary markets, though Ripple’s direct institutional sales were still ruled as securities violations.
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