XRP may already satisfy the requirements to be treated as a digital commodity under the proposed CLARITY Act, according to analyst and lawyer Bill Morgan. The argument challenges concerns that the token cannot qualify as a “mature blockchain system” under the legislation’s 20% ownership threshold.
Morgan points out that the bill’s framework extends beyond that threshold. He highlights an alternative provision: if more than half of a token’s total supply has been distributed outside the issuer and related parties, it can qualify as a pre-existing system. Since the majority of XRP is already in circulation beyond Ripple’s control, this could position the XRP Ledger under the act’s mature system definition. Additionally, a separate Senate draft includes a cutoff for network tokens with exchange‑traded products on national securities exchanges—opening another potential route for XRP.
Importantly, failing to meet the mature blockchain test would not automatically make XRP a security in every transaction. The CLARITY Act clearly distinguishes between a digital commodity and investment contracts involving that commodity. Qualifying digital commodities would fall primarily under CFTC oversight. Ripple holds roughly 4.7–4.8 billion XRP directly, with over 32 billion still in escrow, illustrating the significance of the distribution test.
Despite this favorable interpretation, the CLARITY Act recently hit a roadblock: the Senate postponed its floor vote. However, Justin Slaughter of Paradigm noted the bill is “not dead yet,” leaving the door open for future regulatory clarity.
