XRP May Meet Clarity Act Requirements Despite Ripple's Large Holdings
Ripple's XRP may already meet the requirements to be treated as a digital commodity under the proposed Clarity Act, according to lawyer Bill Morgan.
The act stipulates that no issuer or affiliated person beneficially owns 20% or more of a digital commodity, but Morgan pointed out alternative provisions in the bill that could be relevant to XRP.
XRP's supply is distributed outside Ripple and related parties, with more than half of its total supply held by external parties. This could satisfy the test for a 'mature blockchain system' under the pre-existing-system provision.
The Clarity Act also contains a separate provision involving exchange-traded products, which could potentially benefit XRP as well. However, failing to qualify as a mature blockchain would not necessarily mean XRP itself becomes a security in every transaction.