The race to launch an exchange-traded fund (ETF) tracking XRP, the seventh-largest digital token, has begun.

Canary Capital Group, a new digital asset-focused investment firm founded in September, submitted paperwork with the US Securities and Exchange Commission on Tuesday to launch the Canary XRP ETF. It comes just a week after Bitwise Asset Management Inc became the first firm to file for an ETF tracking the token.

Canary, founded by former Valkyrie Funds co-founder Steven McClurg, said in a statement that it was encouraged by "signs of a more progressive regulatory environment coupled with growing demand from investors".

The filings come after the much-anticipated launch of ETFs that hold Bitcoin and Ether earlier this year, and as companies including VanEck Asset Management and 21Shares AG seek to roll out funds linked to the Solana token. Bitcoin ETFs have lured almost US$19 billion since their debut, while Ether ETFs have around US$550 million of outflows.

Canary's filing didn't include a ticker or anticipated fee. It would be the firm's first ETF.

The XRP filings indicate that issuers are pushing regulators to open up the crypto boom to the wider retail crowd.

"This demonstrates that ETF providers will be closely following the regulatory landscape for perceived daylight in allowing them to offer new products," said Stephane Ouellette, Co-Founder and Chief Executive Officer of FRNT Financial. "There's still uncertainty whether they will be approved and it very much makes sense for two firms born out of the crypto native landscape to try to broaden their product offerings."

The bids also come after a federal judge in August ordered Ripple Labs Inc to pay a civil penalty for selling its XRP token to institutional investors without registering it with US regulators, after a years-long dispute.