A set of provisions tucked into the CLARITY Act — the sweeping digital-asset bill before Congress — would permanently classify XRP as a commodity under CFTC oversight and unlock the entire US banking system for Ripple's infrastructure. The legislation, dated May 2026, uses Section 105 to anchor blockchain-based cryptocurrencies as commodities, effectively writing Judge Torres' 2023 ruling on XRP secondary sales into federal law. Section 110 then qualifies the XRP Ledger as a 'mature blockchain,' and Section 401 lets banks, credit unions, and financial holding companies use digital assets for payments, custody, clearing, and settlement.
Section 105 codifies the Torres precedent
Section 105 of the CLARITY Act defines digital assets and explicitly supports classifying blockchain-based cryptocurrencies as commodities. That language would shift oversight from the SEC to the CFTC — a structural change the crypto industry has pushed for years. More directly, it would turn Judge Torres' ruling that XRP secondary sales are not securities into permanent federal statute. No more reliance on case-by-case court interpretation; the law itself would say XRP is a commodity when traded on secondary markets.
Section 110's 'mature blockchain' test
Section 110 introduces a new regulatory category: mature blockchains under CFTC oversight. To qualify, a blockchain needs a track record of zero downtime, a high transaction count, and decentralized validator placement. The XRP Ledger meets every benchmark — 13 years without an outage, over 90 million transactions processed, and validators spread globally. If the CLARITY Act passes, Section 110 would officially qualify XRP as a digital commodity. That designation matters for compliance, exchange listing, and institutional custody.
Section 401 opens banking to Ripple
The most consequential provision for Ripple's business model is Section 401. It lets US banks, credit unions, and financial holding companies use digital assets for payments, custody, clearing, and settlement. That language is broad enough to cover Ripple's payment infrastructure and the XRP Ledger itself. Right now American banks are largely barred from touching native digital assets for core operations. Section 401 would flip that — and Ripple's existing network of banking partners would have a clear legal channel to deploy XRP for cross-border settlement.
Section 404 and stablecoin limits
Not everything in the CLARITY Act is a green light. Section 404 bans yield payments on just holding stablecoins — a direct constraint on how Ripple's RLUSD can be marketed in the US. But it does allow activity-based rewards through staking, governance, and loyalty programs. That carve-out means RLUSD can still offer attractive features, just not passive yield. The provision shapes how Ripple designs its stablecoin offering for American consumers and institutions.
The bill is still working its way through committee. The next concrete milestone is a markup session expected in late June, where amendments — especially around stablecoin yield and exchange registration — could shift the final text.
