Key takeaways
- Grayscale appoints Anchorage Digital alongside existing custodian Coinbase
- GXRP gains in-kind creation and redemption capabilities
- Grayscale has not disclosed planned XRP custody transfers
An October 5 SEC filing confirms that the Grayscale XRP Trust ETF, trading on NYSE Arca under GXRP, can now hold a portion of its XRP with Anchorage Digital. Coinbase Custody remains the fund's primary custodian.
The same filing reveals another operational change: GXRP can now process in-kind transactions, allowing authorized participants to exchange XRP directly for ETF shares rather than relying exclusively on cash.
Grayscale Adds Second Custodian to XRP ETF
Grayscale signed the Anchorage Digital custody amendment on September 29, making the federally chartered digital asset bank an additional provider for safeguarding the fund's underlying XRP.
The company described the move as part of its risk management approach as the trust grows. However, Grayscale has not determined how much XRP it will transfer to Anchorage, and the arrangement does not replace Coinbase.
According to the filing, Anchorage must generally maintain the private keys associated with its XRP holdings in cold storage. Limited hot-wallet use is permitted for operations such as settling share creations, redemptions and fund expenses.
The custody expansion follows growing institutional interest in XRP ETFs. U.S. funds collectively held approximately 1.13 billion XRP worth $1.68 billion as of September 29, according to previously reported holdings data.
Grayscale's decision also reflects a broader industry approach. The existing 21Shares XRP ETF, for example, already uses Coinbase, BitGo and Anchorage for custody.
GXRP Introduces In-Kind XRP Creations and Redemptions
The second significant change concerns the mechanics of the ETF itself.
Effective September 29, authorized participants or their designated counterparties can create and redeem GXRP shares by delivering or receiving XRP directly. Previously, the fund relied on cash-based transactions for these operations.
Under a cash creation, an authorized participant supplies money that is used to obtain the underlying assets. An in-kind creation instead involves delivering eligible XRP in exchange for newly issued ETF shares.
This distinction matters because direct asset transfers can reduce the need for additional market purchases or sales during routine fund operations.
The process could make share creation and redemption more efficient, although actual transaction costs depend on trading conditions and the fund's operating arrangements.
