The U.S. SEC has officially approved in-kind creation and redemption mechanisms for crypto exchange-traded products (ETPs), a move that could benefit potential XRP ETFs.
Notably, this change allows authorized participants to exchange crypto assets directly rather than relying solely on cash to create or redeem shares of crypto-based ETFs. The agency approved this for the existing Bitcoin and Ethereum ETFs.
SEC Chairman Paul Atkins Reacts
SEC Chairman Paul Atkins emphasized that these approvals are part of a broader effort to establish a regulatory framework tailored to the crypto markets.
He stated that the move helps build a more rational structure for the crypto sector, one that fosters a deeper, more dynamic market and ultimately benefits all American investors.
The in-kind model aligns crypto ETFs with structures already used for commodities like gold, reducing operational friction and cost inefficiencies for fund managers and investors.
Notably, the impacted crypto ETFs include Bitcoin and Ethereum ETFs listed on Nasdaq, CBOE, and NYSE.
Good News for XRP ETFs
In response to the announcement, pro-XRP attorney Bill Morgan called the development “massive” on social media. He noted that this change comes as several XRP ETF applications await SEC approval. According to Morgan, this represents yet another positive step for the broader crypto market.
Massive. In-kind creations and redemptions for crypto ETFs.
And with several XRP ETFs waiting approval this is more good news for the Crypto markets https://t.co/TXzwpMbKVR
— bill morgan (@Belisarius2020) July 29, 2025
For XRP, which has already secured legal clarity, the regulatory door is now more open than ever. The SEC’s recognition of in-kind creation could streamline operations for XRP-based funds.
While no XRP ETF has yet been approved, the structural framework outlined by the SEC is increasingly favorable.
In recent months, the SEC has delayed decisions on more than 10 XRP ETF applications currently under review.
U.S. SEC Commissioner Hester Peirce acknowledged that while the delays are frustrating, they reflect the SEC’s deliberate, rules-based review process. She noted that the process is not fast but ensures a thorough evaluation.
Essentially, the SEC continues to review various altcoin ETF filings and has not ruled out approvals. Despite missed deadlines, analysts expect a decision by October.
SEC Takes Further Steps Toward Market Maturity
In addition to approving in-kind creation, the SEC has also voted to permit mixed spot Bitcoin and Ethereum ETPs. It approved options and FLEX options on certain Bitcoin ETPs and raised position limits for BTC-based ETF options to as high as 250,000 contracts.
These moves further confirm the SEC’s evolving stance on crypto regulation under Chairman Paul Atkins. This contrasts with the more restrictive approach taken under former chairman Gary Gensler.
The Atkins-led Commission has adopted a merit-neutral stance toward crypto-based financial products. Jamie Selway, Director of the Division of Trading and Markets, noted that this policy shift will “result in a more efficient market.”
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
