CLARITY Act faces 50% odds as Lummis ties bill to US financial future

Senator Cynthia Lummis said the CLARITY Act will determine America's financial future, as the crypto market structure bill faces roughly 50% odds of passing before the August recess.

"The CLARITY Act is the most important piece of financial legislation in a generation," Lummis, the Wyoming Republican and ranking member of the Senate Banking Committee, said in a statement. "It will determine whether America leads the next era of finance."

The bill would sort digital assets into three buckets: digital commodities such as Bitcoin and Ethereum regulated by the Commodity Futures Trading Commission, fundraising tokens overseen by the Securities and Exchange Commission, and payment stablecoins governed by banking regulators. The House cleared its version in July 2025, and the Senate Banking Committee advanced its version on May 14. If it does not pass before the August recess, the window narrows to September and then to after the midterms.

For XRP, which has faced years of regulatory uncertainty over its classification as a security, the bill's passage would remove the single biggest overhang on the token. Real-world asset tokenization has already grown from about $12 billion in early July 2025 to nearly $32 billion, all without a federal statute — passage could accelerate those inflows significantly.

What Passage Would Mean for XRP and the Broader Market

If the CLARITY Act passes, XRP would be classified under the CFTC's jurisdiction as a digital commodity, removing the threat of SEC enforcement that has shadowed the token since 2020. That legal clarity would allow US banks and financial institutions to custody and trade XRP without compliance risk, opening the door to institutional capital that has largely stayed on the sidelines.

Former Binance CFO Wei Zhou identified the CLARITY Act as one of three catalysts needed to trigger the next crypto bull market, alongside Google and Facebook launching their own blockchains and China further easing its crypto restrictions. Zhou said the market remains in a bear phase after the October 10-11 liquidation event, which wiped out leveraged whales across major exchanges.

The SEC is also moving on its own track. Chairman Paul Atkins said the agency plans to propose "Regulation Crypto" as soon as this month, which would establish temporary exemptions from registration for developers and create a safe harbor for token issuers. The rule, still under review at the White House Office of Information and Regulatory Affairs, would mark the first major crypto-specific rulemaking under Atkins's leadership.

The Risk if the Bill Fails

If the CLARITY Act does not pass, the bear market could extend into 2027, according to analysts tracking the legislation. Tokens angling most aggressively for institutional capital, including XRP, would likely suffer the most. The bill's failure would also leave the US regulatory patchwork intact, with enforcement actions and interpretive releases that a future administration could rewrite.

One uncertainty is whether the bill has a shot at passing in 2027 or whether negotiating deadlocks preclude any progress. The latter scenario would have a more detrimental long-term impact on token valuations and institutional onboarding.

For now, XRP traded at $1.08 as of 14:30 UTC, down 4.28% over 24 hours, according to CoinGecko. The token has gained roughly 15% since the Senate Banking Committee advanced the bill in mid-May, reflecting the market's pricing of a potential regulatory resolution.

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