$XRP may already satisfy the requirements that are needed to be treated as a digital commodity under the proposed CLARITY Act, according to analyst Bill Morgan.
The lawyer has argued that the bill’s maturity framework goes beyond its 20% ownership threshold.
The comments come in response to concerns over whether $XRP can qualify as a “mature blockchain system” under the aforementioned legislation.
The CLARITY Act’s framework stipulates that no issuer or affiliated person beneficially owns 20% or more of a digital commodity. It also contains additional criteria pertaining to blockchain governance.
However, the lawyer pointed to alternative provisions that could be relevant to $XRP.
The argument is that $XRP could potentially satisfy this test because more than half of its total supply has been distributed outside Ripple and related parties.
If that interpretation is accepted, $XRP Ledger could end up qualifying under the pre-existing-system provision.
There’s also a separate provision involving exchange-traded products. The Senate draft contains a cutoff for certain network tokens with ETFs on a national securities exchange. $XRP could potentially benefit from this provision as well.
Finally, failing to qualify as a mature blockchain would not necessarily mean $XRP itself becomes a security in every transaction.
The CLARITY Act distinguishes between a digital commodity and investment contracts involving that commodity. As a result, the regulatory treatment of a particular sale or offering can differ from the legal status of the underlying token itself. The legislation is designed to place qualifying digital commodities primarily under CFTC oversight.
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Ripple’s directly held, operational $XRP is roughly 4.7–4.8 billion $XRP. The latest widely cited figure is about 4.74 billion $XRP in Ripple-controlled wallets.
That said, more than 32 billion $XRP remained in Ripple-controlled escrow.
The Clarity Act stumbles
In the meantime, the Clarity Act recently faced a major setback.
As reported by U.Today, the Senate has postponed a floor vote on the much-talked-about legislation.
However, Justin Slaughter, Paradigm’s vice president of regulatory affairs, recently opined that the bill was not dead just yet.
