XRP (CRYPTO: XRP) has found itself largely idle throughout 2026, eagerly awaiting one pivotal factor: the CLARITY Act. This legislation, which aims to solidify XRP’s designation as a commodity, has been on the brink of approval for almost a year. It successfully passed through the House last summer…
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XRP (CRYPTO: XRP) has predominantly spent the year 2026 awaiting a significant development: the CLARITY Act. This bill seeks to permanently classify XRP as a commodity, and it has been just shy of passing for almost a year. Last summer, it received approval from the House and garnered support from Coinbase, the U.S. Treasury, and the SEC in April after enduring a lengthy period of resistance. All requirements have been met except for one: a vote from the Senate Banking Committee.
On April 23, more than 120 cryptocurrency institutions, such as Coinbase, Ripple, Kraken, Circle, and Andreessen Horowitz, jointly urged the Senate to advance the CLARITY Act. This appeal followed Senator Bernie Moreno’s warning that the bill must clear the Senate by the end of May or risk being postponed until 2030. With the crypto industry’s leaders advocating for swift action, will the bill finally receive approval, granting XRP the legal clarity it seeks?
Understanding the CLARITY Act and Its Journey So Far
The CLARITY Act—officially referred to as the Digital Asset Market Clarity Act—provides the cryptocurrency sector with something unprecedented in the U.S.: a definitive federal guideline regarding which agency oversees which assets. For years, both the SEC and CFTC have claimed jurisdiction over identical assets, leaving crypto companies entangled in legal battles instead of operating under established regulations.
The CLARITY Act resolves this conflict by categorizing all digital assets into three classifications: securities governed by the SEC, digital commodities managed by the CFTC, and stablecoins under a collaborative framework. For XRP, this means it resides in the digital commodity realm. Consequently, if this bill is enacted, XRP’s classification will be codified under federal law. No future SEC administration will be able to reverse the March 17, official SEC and CFTC designation of XRP as a digital commodity.
On July 17, 2025, the House approved the bill with a vote of 294-134, marking a rare instance of bipartisan support for cryptocurrency legislation. However, progress in the Senate has stalled. A Senate Banking Committee markup set for January 14, 2026, was postponed due to disagreements regarding the ability of crypto platforms to provide yield on stablecoin balances.
Banks contended that this could deplete billions from deposits, while crypto firms argued they were merely offering rewards, not interest akin to bank accounts. This contention paused the bill for two months. Progress resumed on March 20, when Senators Thom Tillis and Angela Alsobrooks reached a compromise that prohibits passive yield on stablecoin holdings while permitting rewards linked to actual usage.
Three weeks later, the bill received its most significant endorsements thus far. On April 9, Coinbase reversed its prior opposition, Treasury Secretary Scott Bessent expressed support in a Wall Street Journal op-ed, and SEC Chair Paul Atkins indicated that his agency was prepared to enforce the act as soon as it receives Congressional approval.
Current Status of the CLARITY Act and Its Approaching Deadline
Considering that Coinbase, the Treasury, and the SEC are all supportive, it would be expected for the Senate Banking Committee to have already scheduled a markup date. However, two weeks after the endorsements on April 9, Chairman Tim Scott has yet to place the CLARITY Act on the agenda, prompting industry frustration.
On April 23, over 120 crypto organizations, led by the Crypto Council for Innovation and the Blockchain Association, urged the Senate Banking Committee to promptly arrange a markup session. This appeal was made the day after Senator Bernie Moreno cautioned at a Washington event that the bill must be passed by the end of May, or it risks being delayed indefinitely. Following this, Polymarket’s odds of the bill passing in 2026 increased from 38% to 46%, even though a markup date is still pending.
The Banking Committee is currently preoccupied with other matters. On April 21, the committee conducted Kevin Warsh’s confirmation hearing for Fed Chair, leaving minimal time for the markup. Additionally, Senator Thom Tillis has requested that Tim Scott postpone the markup to May, citing that banks need more time to finalize the stablecoin yield language. The American Bankers Association is actively campaigning against stablecoin yield in Politico while Tillis is in negotiations.
As the Memorial Day recess begins on May 21, the time for action is limited. With only a few weeks remaining before the midterm calendar takes over, every week of delay narrows the opportunity. Senator Cynthia Lummis has clearly stated that missing this window would mean Congress would likely have to wait until 2030 for another opportunity.
The Implications of the CLARITY Act for XRP
Currently, XRP’s status as a commodity is solely due to a joint interpretation from the SEC and CFTC issued on March 17, stating that it is a digital commodity. This provided XRP with legal protection, but this status is dependent on the current SEC’s interpretation. A future administration could easily revoke this designation without any Senate vote, potentially returning XRP to the legal ambiguity it had been laboring to escape for four years.
The CLARITY Act is the only route to solidifying this status permanently. Once enacted, no new regulator would be able to alter the commodity classification without Congressional approval. Thus, the bill represents the difference between a permanent legal foundation and one that might vanish with a change in administration.
Ripple’s On-Demand Liquidity service utilizes XRP as a bridge currency for rapid settlement of cross-border transactions, reducing processing time from days to mere seconds compared to traditional banking systems. This service is already operational across over 300 financial organizations worldwide. However, U.S. banks remain hesitant to fully embrace XRP without robust federal supports. Ripple has been forced to route the majority of its U.S. institutional traffic through fiat currencies and its RLUSD stablecoin.
When banks receive the federal assurance provided by the CLARITY Act, XRP-based ODL will become legally permissible for their use. Ripple’s institutional infrastructure will begin generating genuine demand for XRP for the first time, and this development could shape the next month significantly.
XRP Price Forecast Based on CLARITY Act Results
Currently, XRP is trading at $1.43, just below the $1.45 resistance level that it has struggled to surpass four times this month. The next four to six weeks are crucial for determining XRP’s price direction based on whether the bill is successful.
Should the CLARITY Act Pass
If the Senate Banking Committee approves the markup in May, and the full Senate subsequently passes it, with presidential approval prior to the midterm political landscape taking shape, XRP ETF inflows would likely surge right away. XRP ETFs outpaced the entire sector last week, capturing 53% of the $224 million that flowed into crypto funds worldwide. Major firms’ compliance teams have been waiting for federal clearance before expanding their investments, and the bill would provide that assurance.
Standard Chartered has predicted between $4 billion to $8 billion in total XRP ETF inflows by the end of the year if the bill is approved. With this influx, XRP is likely to overcome its current resistance, test its 200-day moving average at $1.80, and potentially aim for even higher targets such as $3-5 by late 2026.
Many analysts estimate that XRP could soar between $5 and $10 if the CLARITY Act passes Congress. A surge beyond that would require an additional catalyst, such as the approval of Ripple’s application for a Federal Reserve master account, allowing banks to settle directly in XRP.
Should the CLARITY Act Fail
If Tim Scott fails to schedule the markup prior to the Memorial Day recess on May 21, or if the markup occurs but fails to secure a unified committee vote from Republicans, the bill will most likely be postponed until 2030. In this scenario, XRP would lose its only Ripple-specific impetus and resume tracking Bitcoin rather than leading the market.
The recently positive institutional demand appears likely to reverse, just as it did in March, when weekly XRP ETF inflows plummeted from over $200 million to roughly $2 million by month-end. Without the bill, Ripple’s institutional framework would likely continue to grow utilizing stablecoins and fiat rather than XRP, failing to drive substantial XRP demand.
In February, Standard Chartered already lowered its 2026 XRP projection to $2.80, expecting a delayed bill rather than a failed one. Therefore, in the absence of the bill, XRP is likely to fluctuate between $1.50 and $2.50 for the remainder of the year, with most upside contingent on Bitcoin’s performance.
However, if the $1.28 technical floor is breached during a broader market downturn, the next significant support level is closer to $0.80, with minimal barriers in between.
The Upcoming Month May Determine XRP’s 2026 Outlook
The CLARITY Act is at a critical juncture, and the next 30 days could be decisive. All major endorsements and industry appeals have been made, yet one key element remains unchanged: there’s no markup date on the Senate Banking Committee’s agenda. An announcement from Tim Scott is now the only significant factor until Memorial Day.
The window will open after May 15 when Powell’s Fed term concludes, and the Banking Committee finalizes the Warsh confirmation hearings. This scenario would provide Scott two full weeks to organize and execute the markup before the Memorial Day recess closes the schedule.
For XRP holders, the critical focus in the upcoming weeks will be the Senate Banking Committee’s calendar. An announcement of a markup date from Tim Scott’s office will indicate that the bill is still alive. If such a date is set, the chances of the bill passing will become more tangible. If not, it runs the risk of being shelved for years, forcing XRP to wait for another major catalyst to rally.
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