XRP’s price climbed roughly 8% to $1.23 on Monday, the highest level in several weeks, after Japan’s lower house approved a bill that would classify major cryptocurrencies, including XRP, as financial instruments under the Financial Instruments and Exchange Act. The legislation also proposes a tax reform that would replace Japan’s top capital‑gains rate of 55% with a flat 20% rate.

The regulatory shift is expected to bring greater legal clarity to XRP and other digital assets in Japan, a market that has been a key hub for cross‑border payments and remittance services. Analysts noted that the new framework could lower barriers for institutional and retail investors in Japan, potentially increasing demand for XRP.

In addition to the regulatory news, the price move was supported by macro‑economic developments. On June 15, the United States and Iran announced a peace deal that includes reopening the Strait of Hormuz and lifting a naval blockade. The agreement eased concerns about a potential oil supply shock and triggered a risk‑on rally that lifted Bitcoin 2.68% and pushed altcoins, including XRP, higher.

XRP‑specific exchange‑traded funds (ETFs) recorded net inflows of more than $10 million during the past business week, according to ETF tracking data. This inflow contrasts with the outflows seen in Bitcoin and Ethereum products and indicates growing institutional interest in XRP.

The combination of macro‑driven beta and coin‑specific alpha appears to be driving the recent price action. While the peace deal provided a market‑wide spark, the institutional flows into XRP ETFs added further momentum.

Technical analysis shows that XRP is testing the $1.20 support level after a surge in trading volume. The 7‑day relative strength index (RSI) sits at 80.88, signalling overbought conditions and suggesting a potential short‑term pullback. Analysts have indicated that a daily close above $1.20 would confirm a bullish continuation, whereas a break below $1.14 would invalidate the near‑term uptrend.

The regulatory bill also includes a significant tax reform. By replacing the 55% top capital‑gains rate with a flat 20% rate, the proposal could reduce the tax burden for investors holding XRP in Japan. The change is expected to make the market more attractive to both institutional and retail participants.

Ripple Labs has not issued a statement regarding the regulatory developments or the ETF inflows. The company has, however, continued to develop the XRP Ledger, including the launch of an AI starter kit for the network, which may reinforce the long‑term utility narrative for XRP.

The market’s reaction to the regulatory approval and the peace deal underscores the interconnectedness of macro‑economic events and digital‑asset markets. While the regulatory change is still pending final implementation, it is expected to take effect by the second quarter of 2026, according to reports.

In summary, XRP’s 8% price surge on Monday was driven by Japan’s move to classify cryptocurrencies as financial instruments, the introduction of a lower capital‑gains tax rate, a U.S.-Iran peace deal that eased oil‑market fears, and significant inflows into XRP‑specific ETFs. The next few weeks will test whether the price can sustain levels above $1.20 and whether the regulatory changes will translate into increased institutional participation.

The situation remains fluid, with the regulatory bill still under review and the broader market influenced by ongoing geopolitical developments. Investors and analysts will continue to monitor ETF flows, regulatory progress, and technical levels to gauge the sustainability of XRP’s recent rally.