Clarity Act Impact: What It Means for XRP and Other Cryptocurrencies
The Digital Asset Market Clarity Act (CLARITY Act) passage has been delayed in the U.S. Senate Banking Committee after passing the House in July 2025.
While the bill has received strong support from the White House and President Trump, it is in a state of deadlock. The main battle is between the traditional banking industry and the cryptocurrency sector over stablecoin yields and rewards.
Banks like JP Morgan and Bank of America argue that allowing crypto platforms to pay interest or provide rewards on stablecoin would make them an unlicensed “shadow” savings account. With mid-term elections nearing and the delay in the bill, analysts anticipate its passage being delayed beyond 2026.
What is the CLARITY ACT?
The Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act, is one of the important bills in the US legislation introduced by House Financial Services Committee Chairman French Hill in May 2026. The bill passed the House of Representatives in July with a decisive bipartisan vote of 294 to 134.
The bill aims to draw a clear line between the SEC and the CFTC. Digital assets, such as XRP, Solana, Litecoin, Chainlink, Hedera, and Dogecoin, function as commodities that come under the CFCT jurisdiction.
The SEC would retain authority over assets that resemble traditional securities, particularly involving fundraising token issuance and registration-related disclosures.
Why the CLARITY Act Matters?
The CLARITY Act classified digital assets into three categories. Securities fall under the SEC jurisdiction, and digital commodities fall under the Commodities Futures Trading Commission (CFTC). Stablecoins are treated as a separate category under the oversight of both the SEC and the CFTC.
The bill also gives CFTC exclusive regulatory jurisdiction over spot and cash markets for digital commodities. Within this Act, digital commodity exchanges, brokers, and dealers are registered with and answer to the CFTC. It also creates a provisional registration regime, where companies that register within an initial 180-day window operate under provisional status.
The CLARITY Act also protects decentralized finance. It also creates a new capital-raising pathway for digital asset projects.
What does this Bill mean for XRP?
Investors expect that the CLARITY Act could be highly beneficial for XRP. The Act would convert XRP into a digital commodity under the jurisdiction of the CFTC. It would permanently resolve the long-standing dispute with the SEC, removing the regulatory block that has blocked XRP’s adoption since 2020.
The bill could also provide federal clarity for US banks and asset managers to integrate XRP into their operations, especially for cross-border transactions.
Currently, XRP is trading around $1.49, experiencing high volatility caused by broader market weakness and lingering uncertainty around the CLARITY Act. If the CLAIRTY Act passes, analysts believe that it could reach $5 to $10.
The CLARITY ACT’s Impact on Other Cryptocurrencies
Apart from XRP, the CLARITY Act will bring much clarity to the broader crypto market. Bitcoin and Ethereum, which have been classified as commodities, will be given more legal certainty, making it much easier for investors and institutions to invest in them. It also proposes treating crypto ETFs like stablecoins, enabling real-time, 24/7 settlement, ensuring a significant upgrade from traditional asset settlement times. Moreover, the CLARITY Act will create a safer and more predictable crypto space.
Why are investors and institutions watching closely?
Investors and financial institutions have been cautious about investing in cryptocurrencies due to uncertainty about the regulations. If the Senate passes the bill, it would provide much more clarity, and the crypto market would become more appealing to investors and institutions.
Ripple CEO Brad Garlinghouse has estimated an 80-90% probability of passage by late April 2026. If it does not pass by May or June, market analysts believe that it could be delayed to 2027.
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