The much-discussed CLARITY Act — formally pitched as the Digital Asset Market Clarity Act — hasn’t become law yet, but its framework is already reshaping debates about how major tokens could be treated under U.S. law. Chief among the potential winners or losers: Ripple and its native token, XRP. What’s new in the bill The CLARITY Act aims to move away from vague, case-by-case arguments about “decentralization” and replace them with clear, measurable criteria. A standout metric is a supply-concentration threshold: for a blockchain to be treated as a “mature” network (and more likely a commodity), no single entity or coordinated group may control 20% or more of the native asset’s supply. Why that matters for XRP An XRP community member on X (Arthur) recently drew attention to that 20% rule, arguing that meeting the threshold would be a key route for XRP to be classified as a commodity — potentially clearing a path to broader adoption. That spotlight lands squarely on Ripple’s escrow holdings: Ripple currently controls roughly 40% of the total XRP supply via escrow arrangements, a point that has long fueled debates about XRP’s decentralization and whether it’s tied to Ripple’s corporate actions. Numbers that matter - CLARITY Act supply threshold: 20% (single entity/coordinated group maximum). - Ripple’s current escrow control: ~40% of total XRP supply. - Practical implication: Ripple would need to reduce its holdings by nearly half to get below the 20% threshold. - Current token flow: Ripple releases 1 billion XRP from escrow every month, and historically about 70% of those released tokens are returned to escrow. Compliance won’t automatically mean a forced sale If the CLARITY Act becomes law in its current form, it wouldn’t literally force Ripple to dump or hand over tokens. Rather, it sets a compliance standard Ripple must meet to demonstrate it does not exert control over XRP’s circulating or total supply. How Ripple achieves that — whether via redistribution strategies, technical changes, altered escrow mechanics, token burns, governance shifts, or other tactics — would be a strategic decision. The company could theoretically pursue options designed to satisfy the threshold without triggering disruptive market moves. What to watch next - Legislative progress: The bill is not law yet; its criteria are already informing industry expectations. - On-chain metrics: Any meaningful shift in Ripple’s escrow strategy or actual supply distribution would be monitored closely by traders, regulators, and courts. - Market impact: If Ripple can credibly distance itself from supply control, XRP’s regulatory classification could shift in ways that affect adoption, institutional interest, and legal exposure. Bottom line The CLARITY Act’s 20% ownership benchmark puts a clear, quantifiable spotlight on Ripple’s escrow holdings. Whether that leads to dramatic structural changes for XRP depends on both legislative outcomes and Ripple’s strategic choices — but the bill has already changed the terms of the debate by replacing nebulous decentralization tests with hard supply metrics. Read more AI-generated news on: undefined/news

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