The CLARITY Act draft text was released Monday night, clocking in at 309 pages, ahead of a Senate markup scheduled for Thursday. The bill, which has been delayed since January, introduces a new regulatory category for 'network token' — a digital asset whose value comes from network use rather than company profits. Market expert Bull Winkle said several provisions in the draft are favorable for XRP, though he cautioned the legislation is still a Senate draft and subject to change.
What the network token definition means
The draft defines a network token as a digital asset intrinsically tied to a distributed ledger, where value is derived from activity on the network — not from the profitability of a central company. Winkle argued that XRP fits this definition because its value is tied to activity on the XRP Ledger, not Ripple's corporate earnings. If the CLARITY Act becomes law, it could create a clear regulatory lane for assets like XRP that have long faced uncertainty over whether they are securities.
Protection for prior court rulings
Section 105, spanning pages 110 to 112, includes language that prevents reclassification of assets after a court has already determined a transaction was not a security. Winkle linked this provision to Judge Torres' ruling that XRP secondary market sales were not securities transactions, a decision he described as final. The draft effectively codifies that a transaction deemed non-security before the law's enactment cannot later be labeled a security, potentially locking in the Torres ruling for XRP.
Banks get explicit digital asset authority
Section 401, on pages 195 to 204, explicitly authorizes banks and credit unions — along with their subsidiaries — to use digital assets for payments, custody, clearing, and settlement. That gives traditional financial institutions a statutory green light to handle assets like XRP without fear of regulatory backlash. Winkle noted this is a significant shift from the current patchwork of guidance and enforcement actions.
The Senate markup is set for Thursday, and the draft could see changes before a vote. Winkle called it the most favorable regulatory framework for XRP that the US government has put on paper to date, but the bill still needs to advance through committee and the full Senate. Whether the network token definition survives intact — and whether XRP ultimately benefits — depends on the markup and the amendments that follow.
