Progress marches onward for cryptocurrency in the US as the Clarity Act was passed by the Senate Banking Committee.
The 24-person panel concluded with a bipartisan vote of 15-9 to push the bill forward, although Democrats are asking for amendments. The news is hailed as a win for cryptocurrency businesses and users in the US and around the world.
The main issue that could hold back the Clarity Act from becoming law is one of ethics. In particular, calls for provision in legislation to prevent government officials from influencing and engaging with digital assets and impacting the market.
What will the Clarity Act do?
The Clarity Act is a piece of US legislation designed to provide a regulatory framework for digital assets. Officially titled Digital Asset Market Clarity Act (2025), it will lay out the rules for commodities and securities and allow them to be regulated.
The idea behind it is to protect consumers and provide an official definition of cryptocurrency. The new system will mean that crypto will be regulated in a similar way to traditional banking, with the CFTC and the SEC working to provide regulatory oversight.
Once passed, the Clarity Act will impact crypto dealers, brokers and exchanges, making them register with official bodies and provide a level of legal safety for their customers.
What will the Clarity Act do for XRP?
The act will allow XRP to become ‘official’ as a digital commodity, reducing uncertainty for users. This, in turn, will allow for broader adoption and investment.
In particular, cryptocurrency markets could then benefit from government-backed and large institutions adopting crypto and investing in digital assets.
Credit unions, banks and other traditional institutions could then take advantage of using digital assets for clearing international transfers and payments efficiently. In short, the Act is expected to create a surge in on-ramping for XRP.
The predicted increase in use is expected to boost the price of XRP. Currently trading at around $1.42, it is forecast to reach $3 within the year if the Clarity Act is made law.
How has the progress of the Clarity Act impacted markets?
News that the Clarity Act has passed the Senate Banking Committee has already impacted the cryptocurrency markets positively.
In anticipation of the new regulations, the market crept upward. Bitcoin rose to $82,000 on 14 May when the bill was greenlit. It then settled back to $80,000.
Coinbase and Ethereum also rose several percentage points, with traders eager to capitalise on increased institutional investment in the future.
How will the Clarity Act benefit ordinary businesses?
When the Clarity Act becomes law, it will open the door for businesses not already aligned with cryptocurrencies to adopt it. More traditional organisations are expected to adopt digital assets and open crypto accounts for their businesses.
Similar to recent legislation proposed for the UK, the US regulation will provide a safer framework and a higher level of trust in non-Fiat currencies.
Provide certainty
Knowing that platforms and currency are regulated by an official body – in this case, the CFTC or SEC – can provide businesses with some level of reassurance when investing in or using digital assets in their operations.
Increased protection
Part of the Clarity Act involves anti-money laundering and identification requirements for platforms. This makes customers and investors less vulnerable to fraud and promotes more trust in the financial system.
Easier international dealings
Speed of fund transfers and clear US regulations for on- and off-ramping with fiat institutions will make it easier to do business around the world, without holdups.
Protects developers
The proposed legislation separates the coders from the organisations dealing in currency. Called safe harbour, it means that tech firms are not liable for how customers and crypto companies use their software.
This will encourage more innovation and safer, more efficient technology for digital assets to be developed in the future.
Stipulates a reserve for stablecoin
In the same way that traditional fiat banks are required to have a reserve that covers withdrawals and ensures liquidity, a reserve will be required for stablecoin assets.
This means that the custodian or issuer of the stablecoin token will need to have the equivalent US dollars (or other fiat) in reserve to match the value of what was issued.
Mainstream integration
Regulating and legislating for how crypto is held, transferred and exchanged means it is easier to integrate crypto, such as XRP, into traditional business operations.
For example, customers would be able to pay for products and services with digital currencies, enabling much faster transactions.
What happens next with the Clarity Act?
The next step on the journey for the new bill is when it goes to the Senate floor, and an attempt is made to merge it with a version created by the Senate Agriculture Committee. If successful, the bill will become US law.
The market boost for the crypto industry and its investors is still far from finished, and the bill is still a long way from becoming law. Negotiations around potential abuse of decentralised finance are likely to make approval on the Senate floor a hard-won battle.