Bipartisan Bill Sparks Renewed Debate Over XRP’s Classification
Reports indicate that a bipartisan bill in the US Senate has revived discussions on whether XRP should be classified as a commodity or a security.
The proposed legislation aims to delineate regulatory responsibilities. The Commodity Futures Trading Commission (CFTC) would oversee digital assets like XRP and Bitcoin, while the Securities and Exchange Commission (SEC) would govern traditional securities. Advocates suggest that this shift could resolve years of legal ambiguity for various tokens.
Research from Durham University Labels XRP as a Commodity
Recently, academic insights from Durham University have come into play. Ludovico Lella published a paper in the Journal of Cultural Economy five years ago, examining the dual role of money as both a functional tool and a social framework.
Lella has highlighted Ripple and XRP as significant case studies, characterizing XRP as a “radical form of commodity money.” He introduced the notion of “digital metalism” to describe XRP as a self-sustaining asset that retains value independently of corporate debt or equity.
Notably, his description positions XRP as a digital asset akin to “gold in your hands,” suggesting it is “the most liquid of any asset on the XRP ledger.”
XRP’s Dual Role in Payments
Lella contended that XRP serves two key functions: it acts like a digital asset with commodity-like traits and also plays a role within Ripple’s payment network as a bridging asset for cross-border transactions.
The research maps Ripple’s evolution from a trust-centric mutual credit system to a blockchain-focused payment network aiming for speed and liquidity. This historical perspective helps to clarify why some users view XRP as an independent store of value, while others leverage it for international transfers.
Lawmakers are seeking to clarify the legal parameters so companies and markets can better navigate the applicable regulations. Many in the XRP community swiftly pointed to a 2023 court ruling stating that XRP isn’t a security as proof that the token falls under CFTC jurisdiction.
Experts in the field believe that the court’s ruling combined with new legislation could finally resolve the ongoing debate.
Market dynamics are also shaping the conversation. Community members cite data indicating that XRP currently handles over $5 trillion annually, and Ripple executives have discussed exploring a central bank digital currency (CBDC) while expanding a network that could position XRP as a cornerstone in large-scale payment systems.
Ripple CEO Brad Garlinghouse has set an ambitious target of securing 14% of SWIFT’s $150 trillion trading volume, which, if realized, might reach about $40 trillion by 2030.
Market activity has reflected this chatter, with XRP trading at $2.50, marking a 4% increase from $2.40 in the latest report. Daily trading volumes surged by 52%, with approximately $5.8 billion of XRP transacted.
