- The Clarity Act could withdraw the practically applied XRP regulation to the SEC stock exchange supervision and transfer the trade supervision for Commodity Futures CFTC.
- The design of XRP supports its classification as a commodity as part of the draft law.
You hardly believe it, but the question of the XRP status will appear again, because the committee for financial services of the US representative house will examine the “Digital Asset Market Structure” law, the “Clarity-Act” on June 10th. The draft law has become the focus of the ongoing debate on how digital assets in the United States will be regulated in the future.
Supporters say that law would finally classify digital assets such as XRP as “digital commodities”, and that would make the legal opinion off the table that they are in their nature. If the law is passed, the regulatory supervision would be transferred from the SEC to the CFTC and the regulation of the most important cryptocurrencies would be with an authority with special attention to investor protection.
Clarity Act would redesign the regulation of digital-assets in a practical way
The Clarity Act would create a regulatory framework based on Commodities. According to analysts, the responsibility for qualified assets from Securities and Exchange Commission (SEC) would be transferred to the Commodity Futures Trading Commission (CFTC). According to the crypto expert Smqke This solves the most important regulatory problems and makes crypto investments safer for investors.
The draft law proposes a new classification of the digital assets and introduces the term “digital commodities” for tokens that are not issued by central areas. This includes XRP because it does not have a central issuer, cannot be frozen by an authority and promotes the free transfer of goods.
The draft law also contains measures to protect investors, such as the obligation to separate brokers to separate customer funds from other funds. This should make cryptocurrencies safer for investors and reduce market volatility. Many market participants have closely observed the emergence of the draft law, especially with regard to the regulatory history of XRP.
XRPS Commodity property results from a documentary from 2013
The supporters of XRP refer to a documentary from 2013. It describes XRP as “a radical form of raw material money” and elsewhere as “gold in your hands”. Such characterizations that now reappear when checking the legislation are used by the supporters as the basis for finding that XRP is a “digital goods” or commodity.
As CNF reported, Ripple boss Garlinghouse also mentioned this point in public explanations. He compared Ripple’s property to XRP with the property of Exxon of oil and said that this does not change the classification of the raw material:
We are certainly an interested party in the success of the XRP Ledger, certainly “We have a lot of XRP. But it is as if you say that Exxon has a lot of oil. Oil does not make it a securities. Oil is a raw material.“
His analogy was quoted in legal circles, with supporters say that it distinguishes XRP from traditional securities. The argument supports the efforts of the entire industry to create a clear distinction between decentralized digital assets and corporate value papers such as stocks. Analysts say that this affects regulation and reduces the volatility of XRP, while investing protection is strengthened.
While the review by the committee is approaching on June 10, the Clarity Act continues to shape the debate about the supervision of cryptocurrencies. Industry representatives expect the legislation to trigger far-reaching changes, starting with how XRP and similar assets will be classified under US law in the future.
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