SEC Greenlights In-Kind Creation for US Spot Crypto ETFs

The Securities and Exchange Commission (SEC) has approved in-kind creation mechanisms for US spot crypto exchange-traded funds (ETFs) backed by Bitcoin, Ethereum, and XRP. This change aligns them with commodity ETFs that track physical assets like gold.

In the past, US spot crypto ETFs were only allowed to operate with cash creations and redemptions. Now, authorized participants can deliver the underlying cryptocurrency directly to the trust's custody account in exchange for new ETF shares.

This shift has significant implications for institutional investors who are increasingly turning to XRP ETFs as a way to gain exposure to the asset without directly handling digital wallets.