XRP holds near $1.10 as CLARITY Act vote tests crypto regulation

The CLARITY Act's grandfather clause would instantly classify XRP as a non-security by statute, but the bill's path to 60 Senate votes remains uncertain amid a dispute over ethics enforcement against President Donald Trump.

XRP traded at $1.1023 as of 03:00 UTC, holding a narrow range as the U.S. Senate prepared for a pivotal vote on the Digital Asset Market Clarity Act, a bill that would classify the token as a non-security by statute and reshape how digital assets are regulated in the United States.

"The grandfather clause is the largest single legal event in the bill — it operates at signature speed, with no SEC determination to await," according to an analysis of the merged draft published July 24. White House crypto adviser Patrick Witt told CoinDesk the president agreed "to subject himself to restrictions on conduct. No other president has done that," referring to the ethics section that would temporarily ban senior officials from issuing or sponsoring cryptocurrencies.

The bill's self-executing provisions would deem XRP, Solana and Dogecoin non-securities if they were the principal asset of an exchange-traded product listed on a national securities exchange as of Jan. 1, 2026. That classification fires by operation of law the moment the president signs, bypassing the multi-year rulemaking process required for other provisions such as the self-certification process and digital commodity exchange registration. Senate Majority Leader John Thune said July 23 the bill was unlikely to pass before the August recess, with prediction-market odds on Polymarket falling to about 1 in 3 after Republicans released a new draft this week.

Failure to pass the bill this year would leave XRP's legal status dependent on the SEC-CFTC joint interpretation naming 16 digital assets as commodities — interim policy that a future commission could revoke with a single vote. The Senate's final session before the August break ends in the first week of August, giving lawmakers a narrow window to secure the 60 votes needed for passage.

The ethics impasse

The ethics section has emerged as the central obstacle. Democrats led by Senator Elizabeth Warren of Massachusetts have argued the proposed restrictions are too weak to prevent Trump from profiting from his crypto ventures, which generated more than $1.4 billion in 2025 according to his disclosure. The language would leave enforcement to the U.S. Department of Justice, which Democrats said could not be trusted to investigate a president who has fired officials who probed him in the past.

"The president will simply ignore the law as it's proposed," Warren said, calling the bill's ethics provisions insufficient.

Republicans countered that the restrictions are unprecedented. Senator Cynthia Lummis of Wyoming, a key architect of the bill, wrote on X that "instead of doing the minimum, President Trump voluntarily agreed to tougher guardrails, meaningful enforcement and greater transparency than the law demanded."

The ethics rules would sunset on Jan. 20, 2029, the day Trump's successor would be inaugurated, and would not apply to activity before the law's enactment — meaning Trump's existing $1.4 billion in crypto earnings would not be subject to clawback.

What changes on day one

If the bill passes, the grandfather clause takes effect immediately. XRP, Solana and Dogecoin would become non-securities by statute, ending years of classification ambiguity that has constrained listings, custody arrangements and institutional allocation. The shield for non-custodial software developers under Section 604 would also fire at signature speed, closing the prosecution theory behind privacy-software cases.

But the bill's affirmative machinery — the self-certification process, digital commodity exchange registration, broker and dealer licensing, and the ancillary-asset disclosure regime — all require rulemakings by the SEC and CFTC that analysts estimate will take 18 months to three years. The GENIUS Act, a stablecoin law passed in July 2025, missed its own one-year rulemaking deadline this month, providing a base rate for how slowly implementation can move.

Ripple's ecosystem push

Separately, Ripple has been promoting a performance upgrade to the XRP Ledger, though specific technical details have not yet been disclosed. The upgrade is part of a broader push to boost adoption and utility for the XRP ecosystem, which could support longer-term demand regardless of the legislative outcome.

This article is for informational purposes only and does not constitute investment advice.