Cryptocurrency exchange-traded funds (ETFs) continue to gain momentum in Canada, with a recent surge of interest centered around XRP. In June, three major financial providers—3iQ, Purpose, and Evolve—launched XRP-tracking ETFs, marking a significant development in the digital asset space. This coordinated move signals growing institutional confidence in XRP, a cryptocurrency designed not just for investment but for real-world financial utility.
But what exactly is XRP? And why are so many new ETFs being built around it now?
Understanding XRP: More Than Just Another Cryptocurrency
Unlike Bitcoin, which functions primarily as a store of value, or Ethereum, known for enabling smart contracts, XRP was built with a specific purpose: to streamline cross-border payments. Developed by Ripple, a fintech company founded in 2012, XRP operates on a blockchain optimized for speed, scalability, and low transaction costs.
The core idea behind XRP is simple yet transformative: use digital assets to bridge traditional financial systems. For example, instead of relying on slow and costly international wire transfers through intermediaries like SWIFT, banks can convert U.S. dollars into XRP almost instantly, transmit it across borders in seconds, and convert it into Japanese yen on the other end—all at a fraction of the cost.
“It’s not like Bitcoin, which is used primarily as a store of value. It’s more transactional,” says Michael Zagari, Investment Advisor & Associate Portfolio Manager with Wellington-Altus Private Wealth. “It can be used for micro-payments, it can compete with e-commerce, it can compete with POS systems.”
This transactional focus sets XRP apart from many other cryptocurrencies. While others prioritize decentralization or speculative value, XRP targets efficiency in global finance.
The Role of Ripple and Institutional Adoption
Ripple’s long-term vision has always been to integrate blockchain technology into mainstream banking infrastructure. Over the past decade, the company has partnered with hundreds of financial institutions worldwide—including banks in Europe, Asia, and Latin America—to pilot its payment solutions using XRP.
One of Ripple’s flagship products, RippleNet, leverages XRP as a bridge currency to facilitate real-time settlements. This capability addresses key pain points in traditional finance: high fees, settlement delays (often taking 3–5 business days), and lack of transparency.
Despite its technical promise, XRP faced major regulatory hurdles—most notably a four-year legal battle with the U.S. Securities and Exchange Commission (SEC). The SEC alleged that Ripple’s sale of XRP constituted an unregistered securities offering. However, in mid-2025, the lawsuit was settled, removing a significant barrier to institutional adoption.
👉 Discover how digital assets are reshaping global finance and investor portfolios.
The resolution clarified XRP’s status as a non-security in certain contexts, paving the way for broader financial product development—including ETFs in regulated markets like Canada.
Why Now? The Timing Behind Canada’s XRP ETF Boom
Canada has emerged as a leader in cryptocurrency ETF innovation. After launching the world’s first Bitcoin ETF in 2021, the country continues to expand its digital asset offerings. The simultaneous launch of three XRP ETFs by 3iQ, Purpose Investments, and Evolve Funds Group reflects both market demand and improved regulatory clarity.
Several factors explain this timing:
- Post-lawsuit clarity: With the SEC dispute resolved, investors perceive lower regulatory risk.
- Growing need for faster cross-border payments: Traditional systems like SWIFT are increasingly seen as outdated, especially for individuals and small businesses.
- Network effects driving value: As more institutions adopt XRP for settlements, demand for the token increases—not just for speculation, but for functional use.
Michael Zagari emphasizes that XRP’s value proposition lies in its utility-driven network effects. Unlike Bitcoin, whose price is largely tied to scarcity (capped at 21 million coins), XRP’s appreciation depends on adoption. The more widely it's used for transactions, the greater its underlying value becomes.
“This is not about hoarding coins,” Zagari explains. “It’s about usage. The bigger question is, what is the technology solving? It’s like assessing any other investment—you’re looking for that gap.”
Addressing Risks: Volatility and Practical Challenges
While XRP offers compelling advantages, it's not without risks. One concern is price volatility during currency conversion. For instance, if someone exchanges USD for XRP intending to convert it to JPY moments later, a sudden price swing could result in losses.
However, Zagari argues this risk is minimal due to the speed of XRP transactions—typically settled in 1 to 3 seconds. The shorter the time between conversion steps, the less exposure there is to market fluctuations.
Still, critics point out that widespread adoption hinges on regulatory acceptance beyond Canada. The U.S., despite the settlement, remains cautious about crypto integration in traditional finance. Meanwhile, other countries have varying stances—from open collaboration to outright bans.
Diversification in Crypto: Is Adding XRP Enough?
With Bitcoin, Ethereum, Solana, and now XRP all available via ETFs in Canada, investors face new choices about portfolio construction. But Zagari warns that simply adding another crypto asset doesn’t guarantee diversification.
“Until this point there has been a high degree of correlation between Bitcoin, Ether, Solana, and even XRP,” he notes. “It’s a feature of the early ‘exploration stage’ of these cryptocurrencies.”
True diversification comes from understanding the underlying technology and purpose of each asset. For example:
- Bitcoin = digital gold / store of value
- Ethereum = decentralized computing platform
- XRP = global payment infrastructure
👉 See how next-generation financial tools are redefining investment strategies.
By focusing on what problem each blockchain solves, advisors and investors can build more resilient crypto portfolios.
Frequently Asked Questions (FAQ)
Q: What makes XRP different from Bitcoin?
A: Bitcoin is primarily a store of value ("digital gold"), while XRP is designed for fast, low-cost cross-border payments between currencies.
Q: Who uses XRP today?
A: Hundreds of financial institutions globally use Ripple’s network (RippleNet) to facilitate international payments. Use cases include remittances, corporate transfers, and banking settlements.
Q: Is XRP a good long-term investment?
A: Its potential depends on adoption. If more banks integrate XRP into their payment systems, demand—and price—could rise due to network effects.
Q: Are Canadian XRP ETFs safe to invest in?
A: These ETFs are regulated by Canadian securities authorities and offer exposure without requiring direct ownership of crypto. However, they still carry market and volatility risks.
Q: Can XRP replace SWIFT?
A: Not fully yet—but it offers a faster, cheaper alternative for certain types of transactions. Some banks already use it alongside traditional systems.
Q: How does the SEC lawsuit impact XRP’s future?
A: The 2025 settlement removed major legal uncertainty in the U.S., improving prospects for institutional investment and product development.
The rise of XRP-tracking ETFs in Canada reflects more than just investor enthusiasm—it signals a shift toward utility-driven digital assets in mainstream finance. As global demand for faster, cheaper transactions grows, so too does the relevance of technologies like XRP.
For investors, the key takeaway is clear: look beyond price charts. Focus on real-world application, adoption trends, and regulatory progress when evaluating cryptocurrencies.
👉 Explore the future of finance where innovation meets accessibility.