A new bipartisan discussion draft from the U.S. Senate Committee on Agriculture, released on November 10, proposes a clear regulatory framework for digital assets.The legislation could formally place XRP and other major cryptocurrencies under the oversight of the Commodity Futures Trading Commission (CFTC) as a commodity, a move that could have significant consequences for Ripple and the broader crypto market.A Path to Legal ClarityThe proposed bill, developed by Chairman John Boozman (R-AR) and Senator Cory Booker (D-NJ), grants the CFTC new authority to regulate the “digital commodity” spot market. This establishes a separate regulatory lane from the Securities and Exchange Commission (SEC), which would maintain 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 commentator Arthur highlighting the direct implications for the world’s fourth-largest cryptocurrency by market cap.“The question was simple: is XRP a security or a commodity? A judge already ruled in Ripple’s favor in 2023. Now, Congress is basically turning that decision into law,” he stated.He further argued that XRP’s function for payments and settlements makes it a utility asset, not an investment contract, solidifying its case as a commodity. The potential outcomes, as he outlined, include full U.S. legal clarity, the ability for American exchanges to list XRP without hesitation, and smoother institutional adoption through products like Ripple Prime.The draft legislation also includes protections for self-custody, affirming an individual’s right to hold and transact digital assets directly without an intermediary. It also clarifies that software developers and blockchain infrastructure providers, such as those running nodes, should not be treated as financial institutions solely for their non-custodial roles.Market Context and Future ProspectsThis regulatory development is coming at a pivotal moment for XRP. According to a recent CoinShares report, while digital asset investment products bled over $1 billion last week, XRP was a rare exception. It attracted $28.2 million in inflows, bucking the negative trend that saw major assets like Bitcoin (BTC) and Ethereum (ETH) experience 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 U.S. government shutdown, regulatory agencies are resuming normal operations, clearing the path for these products to go live.While the Senate draft is a preliminary step and requires further negotiation and passage, it represents the most concrete legislative effort to date to resolve the question of asset classification.Market watchers like Arthur believe the combination of potential regulatory clarity, institutional investment interest evidenced by recent inflows, and the imminent launch of spot ETFs creates a powerful narrative for XRP.The post US Senate Bill Could Officially Classify XRP as a Commodity Under CFTC Oversight appeared first on CryptoPotato.