XRP's Academic Recognition: A University Study Calls It 'Digital Gold'
A recent bipartisan draft bill in the US Senate has sparked debates about the classification of XRP as either a commodity or a security. The proposed legislation aims to clarify oversight, with the Commodity Futures Trading Commission (CFTC) regulating digital commodities like XRP and Bitcoin, while the Securities and Exchange Commission (SEC) retains authority over traditional securities.
Adding to this discussion, a study from Durham University has shed light on XRP's unique characteristics. Ludovico Rella's research, published in the Journal of Cultural Economy, explores the dual nature of money as both a tool and a social system. Rella's work highlights XRP as a 'digital form of commodity money', emphasizing its self-standing value as an asset.
The study's most captivating aspect is Rella's analogy of XRP as 'digital gold'. He describes it as a highly liquid asset on the XRP Ledger, designed to facilitate efficient cross-border transactions. This dual role of XRP is further explored, as it not only behaves like a digital asset with commodity-like qualities but also serves as a vital component of Ripple's payment network.
The historical evolution of Ripple, from a trust-based mutual credit system to a blockchain-powered payments network, explains why some users view XRP as a store of value, while others utilize it for international money transfers. Lawmakers are pushing for legal clarity to ensure firms and markets understand the applicable rules.
The XRP community has responded to the draft bill, citing a 2023 court ruling that determined XRP is not a security, thus suggesting it should fall under CFTC oversight. However, critics argue that the combination of this court decision and new legislation might finally resolve the debate.
Market data supports the ongoing debate. XRP's annual transaction volume exceeds $5 trillion, and Ripple executives have discussed CBDC pilots and network expansion, positioning XRP as a central player in large-scale payments. Ripple CEO Brad Garlinghouse aims to capture 14% of SWIFT's $150 trillion volume, which could amount to approximately $40 trillion by 2030.
The price of XRP has responded positively to these developments, rising from $2.40 to $2.50, with a 4% gain at the time of the latest report. Daily trade volume increased by 52%, indicating significant market activity.
