CLARITY Act Update Fuels Speculation Over XRP's Secondary Market Treatment

Senate Republicans have released an updated version of the CLARITY Act just days before a critical vote, and one provision in the latest draft could be particularly important for XRP. According to journalist Eleanor Terrett, Senate Republicans have agreed on roughly 80% of the Tillis-Gallego ethics proposal, which includes requirements for politicians to either divest 'substantial' crypto-related financial interests or place them into a blind trust.

The new text also contains changes to the sections on the Blockchain Regulatory Certainty Act (BRCA), stablecoin yield, and the so-called 'Ag title'. The revised legislation narrows BRCA language to cover the Bank Secrecy Act and civil enforcement. Language that would have explicitly extended protections into criminal cases has been removed.

Stablecoin yield also received an important addition, with a 'circuit breaker' designed to address concerns that yield-bearing stablecoins could pull deposits away from community banks. Federal regulators could intervene if there were evidence of widespread deposit flight from community banks into stablecoins, with Treasury Secretary Scott Bessent serving as the relevant arbiter.

Pro-Ripple lawyer Bill Morgan has drawn attention to a provision in the current draft that could mean XRP's regulatory treatment in secondary markets is less affected by Ripple's holdings. Under the new legislation, XRP would qualify as a crypto commodity in secondary markets regardless of the amount held by Ripple.