Crypto Regulation Stalled
Senate CLARITY Act Fails to Advance, Leaving Crypto Market Rules Stalled
Anonymous
Key Points
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The proposal that XRP could serve as a neutral bridge asset for cross-border settlement remains speculative: the commentary said BRICS has not selected XRP, but argued its speed, low costs and interoperability could make it useful if countries seek alternatives to dollar-based settlement.
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Recent XRP Ledger activity increased substantially, with about 2.1 million transactions, 1.6 million successful transactions and 708,100 payments; however, the roughly 337 XRP burned through fees has virtually no direct supply impact given the tens of billions of XRP in circulation.
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Hoskinson argued that the SEC and CFTC have materially different regulatory capabilities: the SEC has broader disclosure and market-oversight tools, while the CFTC traditionally operates as a principles-based commodities regulator. He therefore favored determining which tokens are genuine commodities before assigning broad authority to the CFTC.
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The 2023 Ripple ruling illustrated why XRP’s regulatory treatment is complicated: the court distinguished the token itself from the specific manner in which Ripple sold it, reinforcing the possibility that an identical asset can receive different legal treatment depending on the transaction and surrounding arrangement.
The Senate's CLARITY Act failed to advance after a 50-49 cloture vote, leaving cryptocurrency market rules effectively stalled. Ripple reports that the bill would have formally classified XRP, Bitcoin, Ether, Solana and Cardano as digital commodities, making those designations harder to reverse through future regulatory changes. A revised 635-page Senate draft had added language to classify XRP as a commodity in secondary-market trading regardless of how Ripple initially sold it.
The failure leaves the crypto industry without statutory clarity on which tokens are commodities versus securities. Cardano founder Charles Hoskinson argued that XRP and ADA should be treated as commodities rather than securities, noting that digital assets may require distinct regulatory categories beyond the SEC and CFTC's current approaches.
A Joint Regulator Interpretation Already Named XRP a Commodity
The SEC and CFTC had already jointly identified XRP along with Bitcoin, Ether, Solana and Cardano as digital commodities in an earlier interpretation. Ripple noted that the CLARITY Act would have made this classification statutory law, anchoring it against future regulatory reversals. The 2023 Ripple court ruling showed how complicated XRP's treatment remains: the court distinguished the token itself from the specific manner in which Ripple sold it.
Revised Senate Draft Addressed Ripple's Holdings Question
The revised Senate bill added language defining ancillary assets in a way that would classify XRP as a commodity in secondary-market trading regardless of Ripple's holdings. This distinction matters because it separates how an asset trades from how it is initially sold. The earlier Ripple court ruling reinforced this possibility: an identical asset can receive different legal treatment depending on the transaction and surrounding arrangement.
Hoskinson Argues for Distinct Regulator Roles in Crypto
Charles Hoskinson argued that the SEC and CFTC have materially different regulatory capabilities. The SEC has broader disclosure and market-oversight tools. The CFTC traditionally operates as a principles-based commodities regulator with less prescriptive authority. Cardano founder Hoskinson favored determining which tokens are genuine commodities before assigning broad authority to the CFTC, rather than having the SEC handle all digital asset rules.
Hoskinson's position reflects growing industry concern that a single regulator lacks the toolset to oversee both securities-like tokens and commodity-like ones. Different tokens have different purposes and market behaviors, he implied, and regulatory treatment should match those realities.
XRP Activity Surges While Commodity Role Remains Speculative
Recent XRP Ledger activity increased substantially, with about 2.1 million total transactions and 1.6 million successful transactions recorded. Roughly 337 XRP were burned through fees, though this has virtually no direct supply impact given the tens of billions of XRP in circulation. Ripple has proposed that XRP could serve as a neutral bridge asset for cross-border settlement, but this role remains speculative and depends on whether countries seek alternatives to dollar-based settlement.
Industry commentary noted that BRICS has not selected XRP for any settlement role. However, advocates point to XRP's speed, low costs and interoperability as features that could make it useful if nations pursue non-dollar payment corridors. The question of whether BRICS nations will actually adopt XRP for settlement — and whether the CLARITY Act's failure makes such adoption less likely — remains open.
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