The US Senate bill could officially classify XRP as a commodity under the supervision of the CFTC

The bill grants the CFTC authority over the spot markets for digital commodities, separating it from the SEC’s jurisdiction.

A new bipartisan discussion bill from the US Senate Agriculture Committee, released on November 10, proposes a clear regulatory framework for digital assets.

The legislation could formally place XRP and other major cryptocurrencies under the supervision of the Commodity Futures Trading Commission (CFTC) as commodities, a move that could have significant implications for Ripple and the broader crypto market.

A path to legal clarity

The proposed bill, developed by Chairman John Boozman (R-AR) and Senator Cory Booker (D-NJ), grants the CFTC new authority to regulate the spot market for “digital commodities.” This would create a separate regulatory arm of the Securities and Exchange Commission (SEC), which would retain jurisdiction over securities.

For XRP, this classification would codify a legal distinction that was at the heart of Ripple’s long-running dispute with the SEC.

The community was quick to connect the legislative dots, with commenter Arthur to emphasize the direct consequences for the world’s fourth largest cryptocurrency by market capitalization.

“The question was simple: Is XRP a security or a commodity? A judge ruled in favor of Ripple back in 2023. Now Congress is actually putting that decision into law,” he stated.

He further argued that XRP’s payment and settlement function makes it a utility, not an investment contract, reinforcing its value as a commodity. The possible outcomes, as he outlined, include full U.S. legal clarity, the ability for U.S. exchanges to list XRP without hesitation, and smoother institutional adoption through products like Ripple Prime.

Also the bill includes self-custody protection, affirming an individual’s right to own and trade digital assets directly, without an intermediary. It also clarifies that software developers and blockchain infrastructure providers, such as those who manage nodes, should not be treated solely as financial institutions due to their non-monitoring role.

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Market context and future prospects

This regulatory development comes at a crucial time for XRP. According to a recent CoinShares report, XRP was a rare exception, while digital asset investment products were worth more than $1 billion last week. It attracted $28.2 million in inflows, breaking the negative trend that saw major assets like Bitcoin (BTC) and Ethereum (ETH) see significant outflows.

At the same time, the market is anticipating the launch of the first spot XRP ETFs. Five such funds were recently added to the Depository Trust & Clearing Corporation’s (DTCC) active roster, a final step before they can begin trading. With the recent end of the US government shutdown, regulators are resuming normal activities, paving the way for these products to go live.

While the Senate bill is a preliminary step and requires further negotiations and approval, it represents the most concrete legislative effort yet to resolve the issue of asset classification.

Market watchers like Arthur believe that the combination of potential regulatory clarity, institutional investment interest as evidenced by recent inflows, and the impending launch of spot ETFs creates a powerful story for XRP.