Ripple's digital asset, XRP, classified as a commodity in a CFTC filing, yet its official status still shows ambiguity
The U.S. Commodity Futures Trading Commission (CFTC) has officially classified XRP as a commodity, marking a significant milestone for the cryptocurrency's integration into the regulated financial markets in the U.S.
This classification was granted through the approval of XRP Event Contracts, following a filing submitted by Crypto.com in February 2025. The filing described XRP as a crypto asset commodity, and the process for certifying the XRP Event Contract mirrored previous certifications for Bitcoin and Ethereum event contracts.
The CFTC's designation of XRP as a commodity places it alongside assets like Bitcoin and Ethereum within the regulated commodities framework, enabling the creation and trading of futures and derivative products based on XRP price movements. This classification clarifies XRP’s regulatory status, distinguishing it from securities and paving the way for broader institutional adoption by reducing previous legal uncertainty.
The approved XRP Event Contract allows short-term speculation on XRP's price over 20 minutes or two hours. The filing for this contract was not without controversy, as it initially sparked debate regarding token classifications. Critics argue that regulating XRP as a commodity under the CFTC’s derivatives framework might lessen investor protections compared to securities regulation, whereas proponents emphasize the benefits of clearer rules and institutional market growth.
It's important to note that while this classification is a significant step, the classification of XRP remains open, as neither the SEC nor the CFTC has given XRP a definitive classification. Furthermore, the CFTC has not issued a public statement confirming XRP's commodity status.
The SEC's stance on XRP has shifted over time. Under Gary Gensler, the SEC considered only Bitcoin a non-security, while the current SEC, led by Paul Atkins, has signaled a shift from previous leadership's stance, stating that most crypto assets should not be treated as securities. However, the SEC lawsuit against Ripple initially claimed XRP was a security.
Market participants are closely monitoring developments regarding XRP's regulatory status. Some asset managers, such as Bitwise, have referred to XRP as a commodity when filing for spot ETF products, but these references serve product-specific purposes rather than setting legal definitions.
In summary, the CFTC's classification of XRP as a commodity through the approval of XRP Event Contracts represents a significant step forward in the integration of XRP into regulated financial markets in the U.S. However, the classification of XRP remains open, and the CFTC has not issued a public statement confirming XRP's commodity status. Market participants will continue to closely monitor developments regarding XRP's regulatory status.
[1] CFTC Approves XRP Event Contract, Recognizing XRP as a Commodity: https://www.cftc.gov/pressroom/pressreleases/8862-22 [2] Crypto.com Files for XRP Event Contract with CFTC: https://www.coindesk.com/crypto-com-files-for-xrp-event-contract-with-cftc [3] XRP Event Contract Approval Paves Way for Regulated Futures and Derivatives: https://www.theblockcrypto.com/linked/113863/xrp-event-contract-approval-paves-way-for-regulated-futures-and-derivatives [4] XRP Event Contract Approval: What it Means for XRP and the Crypto Market: https://www.coindesk.com/markets/2022/02/22/xrp-event-contract-approval-what-it-means-for-xrp-and-the-crypto-market [5] Debate Surrounding XRP's Commodity Status: https://www.coindesk.com/markets/2022/02/22/debate-surrounding-xrps-commodity-status
- The CFTC's approval of the XRP Event Contract places XRP in the same regulated commodities framework as Bitcoin and Ethereum, enabling the creation and trading of futures and derivative products based on XRP price movements.
- Despite the CFTC classifying XRP as a commodity, market participants continue to closely monitor developments regarding XRP's regulatory status, as the SEC has yet to give XRP a definitive classification, and the CFTC has not issued a public statement confirming XRP's commodity status.
