Grayscale has updated the operating setup for its XRP exchange-traded fund, broadening how institutional participants can create and redeem shares and adding a second custody provider for the trust’s holdings.
The Grayscale XRP Trust ETF, which trades under the ticker GXRP, now permits authorized participants to use direct XRP transfers alongside cash for share creation and redemption. In a separate change, Anchorage Digital Bank N.A. has been added as an eligible custodian next to Coinbase Custody Trust Company.
Direct XRP transactions begin for authorized participants
The in-kind creation and redemption option became available on Sept. 29. Under this model, authorized participants can deliver XRP to the fund in exchange for newly created ETF shares, or return shares and receive XRP back from the trust.
Grayscale said Virtu Americas LLC and Macquarie Capital (USA) Inc. support both the XRP-based and cash-based routes. That means institutions working through those firms can choose between transferring the underlying token directly or using cash when interacting with the fund.
Second custodian added for fund holdings
A separate operational change took effect on Oct. 5, when Anchorage Digital Bank N.A. became eligible to serve as a custodian for the trust’s XRP. Grayscale said it intends to place a portion of the ETF’s XRP with Anchorage.
Coinbase Custody Trust Company remains the primary custodian. According to the announcement, Grayscale will decide how to divide holdings between the two providers as the trust expands.
Why the in-kind option matters
Allowing XRP to move directly in and out of the fund could reduce the need for the ETF itself to buy or sell tokens in the open market when shares are created or redeemed. In theory, that may lower trading-related costs inside the product.
Grayscale also indicated that a more direct exchange process could help ETF share prices stay closer to the value of the XRP backing each share. That kind of pricing efficiency depends on active use of the mechanism by authorized participants.
Potential limits and the next step
Grayscale also noted that the benefits are not guaranteed. If participation in the in-kind process is limited, the trust could still face weaker liquidity and wider spreads, which in turn could reduce the pricing advantages the structure is meant to provide.
For now, the confirmed changes are the Sept. 29 launch of in-kind XRP creations and redemptions and the Oct. 5 addition of Anchorage as a second custodian. Coinbase remains the lead custody provider while Grayscale determines how to allocate assets between the two firms as the fund grows.
Source: news.bitcoin.com