What to Know:
- XRP is being discussed as a “radical form of commodity money” amid bipartisan efforts for regulatory clarity in the U.S.
- A 2019 academic study highlights XRP’s unique position, functioning like “digital gold” with independent value.
- Proposed legislation aims to classify digital assets, potentially placing XRP under the regulatory purview of the CFTC.
XRP’s classification is once again a hot topic as bipartisan legislation seeks to provide legal clarity for digital assets in the United States. Recent discussions highlight XRP’s potential designation as a commodity, a distinction that could significantly impact its regulatory future. An academic study has resurfaced, reinforcing the argument that XRP functions more like “digital gold” than a traditional security.
A 2019 study by Ludovico Rella described XRP as a “radical form of commodity money,” emphasizing its self-contained nature and independence from intermediaries. This characterization aligns with the view that XRP operates as a digital asset with intrinsic value, similar to precious metals. The study also addressed Ripple’s evolution from a mutual credit system to a blockchain-based payment solution.
The proposed Bipartisan Market Structure Draft aims to clarify the regulatory landscape by dividing oversight between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Under this framework, digital commodities like XRP and Bitcoin would fall under the CFTC’s authority. This division seeks to resolve years of uncertainty regarding the treatment of cryptocurrencies under federal law.
Members of the XRP community view this legislative effort as a positive step toward solidifying XRP’s status as a digital commodity. Such a classification would build on the 2023 court ruling that determined XRP was not a security, further clarifying its regulatory standing. The utility of XRP in payments, liquidity provision, and settlements supports its categorization as a commodity rather than an investment contract.
The ongoing regulatory developments and academic insights contribute to a clearer understanding of XRP’s role in the evolving digital asset landscape. As legislation progresses, the potential classification of XRP as a commodity could pave the way for greater adoption and integration into traditional financial systems. This clarity is crucial for investors and traders navigating the complexities of the crypto market.
Source: Original article
