The CLARITY Act is now one clause away from passing: Should XRP holders celebrate?

After months of deadlock, the CLARITY Act just cleared the obstacle that had been holding it up all summer. President Trump agreed to the ethics rules Democrats demanded, and the only question left now is who gets to enforce them.

XRP (CRYPTO:XRP) climbed past $1.13 on the news—a level it had struggled to hold for weeks. The rest of the market also rallied, with Bitcoin breaking above $66,000 and major altcoins climbing higher. On Polymarket, traders lifted the odds of the bill becoming law this year from about 32% to the mid-40s.

So with the CLARITY Act this close to a Senate floor vote, should XRP holders start celebrating?

What Just Changed for the CLARITY Act

The CLARITY Act has been stuck for months on a single dispute. Democrats refused to supply the votes it needs without ethics rules restricting the president's own crypto business, and Republican negotiators could not agree to those rules without Trump's approval. Neither side moved, and the deadlock lasted long enough that investors were recently asking whether XRP would fall below $1 while the bill went nowhere.

That changed this week, when the White House, Senator Cynthia Lummis, and Senator Bernie Moreno agreed on ethics language over the weekend and Trump signed off on it on Monday. Trump accepted rules written to restrict his own crypto business, which a White House official described as "the most comprehensive and wide-ranging ethics provision in history." 

According to the leaked terms, the language would bar the president, vice president, and members of Congress from issuing crypto while in office, which is the exact conflict Democrats had demanded be fixed. The market responded immediately, with the total crypto market gaining roughly $70 billion in a day and XRP finishing as the third-best performer among the top 50 coins, behind only Ondo and Cardano.

All of that came from a news report rather than an actual law, since no bill text has been released and no floor vote has been scheduled. Traders were already pricing what passage would be worth.

However, that optimism has already cooled, with Polymarket's odds peaking near 48% on Tuesday before slipping back to around 41%, because the ethics agreement settled one argument and immediately started another.

The Enforcement Fight Holding Up the CLARITY Act

The argument is no longer about whether the ethics rules exist, since Trump has already agreed to those. What lawmakers are fighting over now is who gets to enforce them. An ethics rule only works if someone is willing to act on it, and the two sides want very different people holding that power.

The agreed language hands that job to the Department of Justice (DOJ) alone and leaves state attorneys general out of it. Democrats object because the DOJ answers to the president those rules are written to restrict, and Trump's own personal lawyer, Todd Blanche, is currently going through confirmation to run the department. State attorneys general would stand outside that chain of command, and many of them are Democrats, which is precisely why Republicans want them kept out.

Senator Angela Alsobrooks, one of only two Democrats who voted the bill out of committee, has rejected the offer outright, calling it "unserious" and saying she cannot support the bill in that form. She added that she will "keep working from that floor to reach an agreement that holds us all accountable," meaning she sees the current offer as a base to negotiate up from, not a reason to quit.

Both sides also know what failure would cost, because this same argument collapsed the deal in June, when Republicans stripped out a mechanism that would have let state attorneys general challenge the DOJ for refusing to enforce the rules. 

Nobody at the table wants to lose the bill twice over the same clause. The CLARITY Act needs 60 votes to clear the Senate, so at least seven Democrats have to join, and only two have backed it so far. The provision exists for a reason, too, since Trump reported more than $1.2 billion in crypto income last year in his financial disclosure.

Can the CLARITY Act Pass Before the August Recess?

The bill can still pass in time, though the window is narrower. Roughly a dozen working days remain before the Senate leaves on August 7, and missing that date would not simply delay things. The chamber does not return until September 11, by which point midterm campaigning takes over the calendar and major bipartisan legislation stops moving. That is why Senator Cynthia Lummis warned that a failed push this year likely shoves the next realistic window out to 2030.

Before any vote can happen, Majority Leader John Thune has to give the bill floor time and file a cloture motion to start the process, and as of the middle of this month he had done neither. The CLARITY Act has been waiting on the Senate calendar since June 1, eligible for a vote the moment he schedules one.

Thune says he sees a good chance of reaching a bipartisan agreement, but he wants that agreement in hand before he spends floor time on it. That makes the enforcement clause more than one obstacle among several, because until Democrats sign on, the vote never gets scheduled in the first place.

The people closest to the negotiation have turned noticeably more positive over the past few days. Senator Kevin Cramer says the Senate is "almost there," describing what is left as small details, while Treasury Secretary Scott Bessent puts the bill on the "1-yard line." Galaxy CEO Mike Novogratz, who has been pushing publicly for passage, says talks are down to "word-smithing" around the ethics language. 

Negotiators are also working through DeFi provisions and illicit-finance safeguards, though both sides still describe ethics as the main hurdle. Galaxy Research is more cautious and puts passage at 50-50, but the people at the table are no longer fighting over what the bill does. The risk now is that the clock runs out before one clause gets its final wording.

What CLARITY Act Passage Would Mean for XRP

XRP already won its commodity classification in March, when the SEC and CFTC jointly ruled that it is not a security. The problem is that the ruling came from the agencies themselves rather than from Congress, which means a future administration could reverse it. That is the reason large institutions have stayed on the sidelines despite the ruling, and it is exactly what the CLARITY Act would fix by writing the classification into federal law.

Once that footing is permanent, the capital that has been waiting can commit. Our own projections put the figure at up to $8 billion in fresh ETF inflows which would push the XRP price significantly higher.

Moreover, XRP Holders got a preview of that this week. XRP outperformed nearly every large cap in the market on nothing more than a news report about an ethics clause, with no bill text released and no vote scheduled. That is what anticipation alone is worth, which says something about what confirmation would be worth.

But the odds slipping back from 48% to 41% in two days is the honest picture. One clause still has to be settled, seven Democrats still have to vote yes, and Thune still has to find floor time before August 7. The CLARITY Act is closer than it has ever been, which is worth something, but it is not law yet.

Contact [email protected] for any questions or corrections.