XRP's Commodity Status: Will CLARITY Act Bring Clarity?
The classification of XRP as a commodity has been clarified in US law, but its status remains uncertain. In March 2023, regulators named XRP a digital commodity, joining Bitcoin (BTC) and Ether (ETH), among others. However, the SEC's Chairman Paul Atkins stated that laws passed by Congress remain essential to prevent future changes in interpretation.
The proposed CLARITY Act aims to settle the classification of XRP once and for all by moving its status from an agency decision to a congressional law. This would make it harder for future regulators to reverse the decision. The bill also includes market oversight, giving the CFTC authority over digital commodity spot trading.
Despite XRP's commodity classification, institutional investors have yet to flood into the market. In fact, the funds that launched seven US spot ETFs have seen a decline in inflows since the initial month. This suggests that regulatory clarity alone may not be enough to bring in significant institutional money.