XRP Classified as Commodity in Revised CLARITY Act

The revised CLARITY Act draft now stands at 635 pages, up from 616. This 19-page increase includes a new definition for ancillary assets. The text classifies XRP as a digital commodity in secondary markets. This designation applies regardless of the quantity of tokens held by Ripple. The change was released hours before the Senate cloture vote.

Senate Republicans circulated the updated text shortly before the September 15 vote. The amendment resolves the classification dispute that triggered a three-year lawsuit. It decouples the asset's status from the originator's balance sheet. The bill specifies that an ancillary asset remains a network token. No provision in the draft causes such an asset to lose this status.

New definition overrides issuer concentration

The draft defines an ancillary asset as a network token. Its value depends on the entrepreneurial efforts of an originator. This language overrides concerns about supply concentration. Previously, large holdings by an issuer could suggest securities treatment. The new text makes the issuer's share of supply irrelevant to the classification.

This approach contrasts with the 2023 district court ruling. That decision treated programmatic sales differently from institutional sales. The revised CLARITY Act codifies a single status for secondary markets. It prevents re-litigation of the asset's nature per transaction. The classification is fixed to the asset itself.

Legislative timing and vote requirements

Legislative text is usually finalized months before a vote. The release of this revision occurred within 24 hours of the cloture motion. The Senate requires 60 votes to proceed. Republicans currently hold 53 seats. The revision arrived alongside concessions on conflict-of-interest rules. These concessions aim to secure Democratic support.

The inclusion of state-level enforcement powers is part of this package. These measures are designed to address Democratic concerns. The specific language regarding XRP was inserted during this final negotiation phase. The outcome determines the regulatory path for the token. The decision hinges on this single definitional clause.

Market implications of commodity status

Treating XRP as a commodity removes it from certain securities regulations. This status applies to trades between unrelated parties on exchanges. It distinguishes secondary market activity from primary issuance. The definition clarifies the legal framework for institutional buyers. It provides certainty that was absent during the litigation period.

The shift impacts how market participants view risk. Concentration no longer dictates the asset's legal category. This change aligns with the treatment of other decentralized networks. The bill's final passage depends on the upcoming vote. The specific wording remains the central point of discussion. Analysts from GN markets/commodities (en-US) note the significance of this definitional shift.