The SEC has classified XRP as an eligible asset for cryptocurrency ETFs under NYSE’s proposed listing standards, placing Ripple’s token on equal regulatory footing with Bitcoin and Ethereum. This marks a sharp reversal from the previous administration’s treatment of XRP as a potential security. The classification follows a federal court ruling that XRP is not a security and reflects a broader regulatory shift toward commodity classification for digital assets.
From Security Limbo to Commodity Status
For four years under former SEC Chair Gary Gensler, XRP remained in regulatory limbo. The SEC signaled that only Bitcoin and Ethereum could qualify for ETF approval, effectively excluding other digital assets from traditional finance onramps. Judge Analisa Torres’s ruling in SEC v. Ripple established XRP as a non-security, dismantling the legal foundation for the agency’s prior position. The current SEC administration has since issued joint Token Taxonomy guidance with the CFTC, formally classifying XRP as a commodity. Brad Garlinghouse, Ripple’s CEO, noted the current administration provided “more clarity to the crypto industry in a year than Gary Gensler’s administration did in four years.”
Eligible Asset Requirements and Market Impact
Under NYSE’s proposed rule change, eligible crypto assets must meet an 80% net asset value requirement, a threshold XRP now satisfies. At the time of publication, XRP traded at $1.38. The SEC’s publication of NYSE’s proposed rule change signals formal movement toward approval. This classification removes a major institutional barrier: previously, crypto ETF sponsors could only hold Bitcoin and Ethereum, forcing them to either exclude XRP entirely or hold it outside the fund structure. The elevation of XRP to eligible status opens direct pathways for spot ETF listings and fund inclusion.
Regulatory Clarity Reshapes Industry Strategy
The XRP decision reflects a broader recalibration of crypto regulation away from security-first enforcement toward commodity frameworks. The CFTC, not the SEC, now holds primary jurisdiction over XRP trading and derivatives. This jurisdictional clarity removes years of legal uncertainty that inhibited institutional adoption. Ripple has positioned itself as the largest stakeholder in XRP’s success, and Garlinghouse has emphasized the company’s commitment to the token’s development. The shift also pressures other digital assets to seek similar commodity classification, potentially accelerating the CLARITY Act’s expected codification of commodity status for non-Bitcoin, non-Ethereum tokens.
Next Milestones and Unresolved Questions
NYSE’s proposed rule change still requires formal SEC approval. The CLARITY Act remains pending in Congress, and its passage would provide statutory backing for commodity classification. Ripple’s next challenge is converting regulatory clarity into institutional adoption. Cardano founder Charles Hoskinson has criticized Ripple’s business model, arguing it doesn’t benefit XRP holders directly. Garlinghouse responded but did not directly address the structural claim. How quickly spot XRP ETFs launch, and whether they gain meaningful AUM, will determine whether regulatory parity translates to market parity.
