Ripple CEO signals growing confidence in CLARITY Act passage

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Brad Garlinghouse on CLARITY Act

CLARITY Act advances amid interagency coordination

At the center of the debate is the Digital Asset Market CLARITY Act, a proposal designed to delineate regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The bill aims to determine which tokens qualify as securities and which fall under commodities oversight, while establishing clearer registration pathways for exchanges, brokers and custodians.

The House has already advanced the legislation, and the Senate is now weighing related provisions. The White House and Treasury Department have signaled support, while coordination efforts between the SEC and CFTC — including initiatives such as “Project Crypto” — have helped ease long-standing jurisdictional disputes.

Garlinghouse has argued that prolonged uncertainty has constrained innovation. “The industry can’t live in limbo,” he said, emphasizing the need for predictable compliance standards. Ripple itself secured a federal court ruling in 2023 stating that XRP is not inherently a security in secondary market sales, a decision widely viewed as a landmark for the sector.

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Polymarket bettors are currently assigning roughly an 80% probability that the bill will pass by the end of the year, reflecting growing market confidence even as legislative negotiations continue.

Probability of CLARITY Act passage. Source: Polymarket

Stablecoin yield disputes complicate timeline

Despite progress, disagreements remain — particularly around stablecoin yield mechanisms. While some legislative proposals restrict issuers from paying interest, banks have raised concerns that exchange-based reward programs could function as de facto yield products, potentially diverting deposits from traditional institutions.

The supply of yield-bearing stablecoins has expanded sharply since late 2024, reaching multi-billion-dollar levels in 2025. This rapid growth has intensified political debate over how such products should be regulated under anti-money laundering, custody and consumer protection frameworks.

Corporate treasurers are also closely watching developments. Stablecoins such as USDC and USDT are increasingly used for cross-border payments and liquidity management. However, under both IFRS and GAAP accounting standards, stablecoins are generally treated as intangible assets rather than cash equivalents, requiring careful valuation and reporting.

Market implications and industry response

Ripple has deployed substantial capital toward acquisitions in recent years, broadening its footprint into custody, prime brokerage and treasury solutions. Garlinghouse signaled that the company’s immediate focus will shift from pursuing new large-scale deals to consolidating and integrating its existing businesses.

If enacted, the CLARITY Act could reduce regulatory risk premiums, provide clearer market structure and encourage broader institutional participation. However, implementation would likely unfold in phases, from legislative approval to agency rulemaking and enforcement.

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