Shares in four U.S. spot XRP exchange-traded funds are being pledged as collateral against nearly $4 billion of borrowing from a Charles Schwab money market fund, according to the fund's latest monthly portfolio report.
The Schwab Prime Advantage Money Fund's N-MFP3 filing, which covers the period ending Aug. 31, discloses that XRP products appear across five separate repurchase agreements. JP Morgan Securities and Bofa Securities serve as the counterparties on these agreements, which total $3.99 billion.
The filing lists XRP ETF products from four issuers: Grayscale, Canary, Franklin, and Bitwise. JP Morgan is the counterparty on four agreements valued at $1.093 billion, $1.198 billion, $400 million, and $383 million, with rates of 3.85% and 4.13%. Bofa Securities is the counterparty on the fifth agreement, valued at $919.5 million at a 4.15% rate.
Because prime money market funds are not permitted to purchase digital asset ETFs directly, the fund lends cash on a short-term basis while the broker-dealer borrowing the cash posts a basket of securities as security. XRP ETF shares have turned up inside those collateral baskets.
The total value of XRP ETF collateral reported in the filings has grown over recent months, rising from $35,973 in April to $1.99 million in June, $2.29 million in July, and reaching at least $8.3 million by August 31. August marked the first month that all four major U.S. spot XRP ETFs appeared together, with the counterparty list widening to include Bofa and JPMorgan.
While institutional ownership of XRP ETFs remains thin and concentrated among a small group of holders, market observers note that acceptance into tri-party collateral baskets indicates that risk desks and counterparty screens have approved the assets for short-term funding markets.
