Ripple CEO: CLARITY Act’s Fate Hangs in the Balance – Next 2 Weeks Critical

by

<a href="https://pricpr.com/xrp-usd/">Ripple</a> CEO Warns: If CLARITY Act Markup Slips, Chances Fall ‘Precipitously’

Following the release of the initial draft of the CLARITY Act by the Senate Banking Committee, Ripple CEO Brad Garlinghouse warned that significant challenges still lie ahead for the bill, which aims to establish rules for the cryptocurrency market.

At the CoinDesk Consensus Miami event on Tuesday, Garlinghouse stated that the next two weeks will be critical for the progress of the legislation, and will determine if it can overcome a final, important procedural step.

Ripple CEO Defends CLARITY Act Compromise

Brad Garlinghouse stressed that passing the CLARITY Act isn’t a sure thing. He highlighted the upcoming hearing in the Senate Banking Committee as a crucial next step that could change things.

He cautioned that if progress wasn’t made soon, the chances of the entire plan succeeding would decline rapidly. He stated, “If it doesn’t happen then, the likelihood will fall sharply.” Despite this concern, he remains optimistic that the bill will ultimately pass.

As Bitcoinist and other news outlets reported over the weekend, a draft of the CLARITY Act aims to limit some of the ways crypto companies earn profits, especially regarding how they manage stablecoins used for payments.

The proposed rules would prevent crypto companies from offering any rewards, like interest, to customers for holding payment stablecoins. The goal is to treat these holdings similarly to how traditional banks handle customer deposits.

The bill also has a key exception: companies can still offer rewards or incentives, as long as those benefits aren’t essentially the same as the interest someone would earn from a bank account.

Determining the line between acceptable promotions and incentives that function like interest paid on deposits has been a major sticking point during negotiations ever since the CLARITY Act was first proposed.

Garlinghouse admitted the result wasn’t ideal, stating, “It’s definitely not perfect.” He explained the bill was a result of finding middle ground and making concessions, but maintained that establishing clear regulations is preferable to letting the industry continue operating without them.

The Fight Over What Counts As ‘Yield’

I was reading Eleanor Terrett’s report on Crypto In America today, and it sounds like some people in the crypto space are worried about the draft of the CLARITY Act. The concern is that if it ends up broadly banning yields, it could actually *help* traditional banks by giving them an edge over crypto companies.

Despite the agreement, some banks are concerned it might not fully stop crypto companies from exploiting loopholes.

According to Terrett, banks are beginning to disagree about the details of the agreed-upon yield. Specifically, some of the larger banks that work directly with customers are unhappy with certain phrases in the final agreement.

From what I’m seeing, the crypto firms *without* direct connections to consumers seem pretty okay with how the CLARITY Act is shaping up. It’s good news, honestly. Even some smaller community banks are showing interest, although their industry group, the ICBA, has raised some valid points about how it might impact them – they want to make sure their concerns are heard, and I get that.

Terrett shared that at least one large bank is worried the CLARITY Act might be written too specifically. This could allow crypto companies to find loopholes and offer rewards that function similarly to bank interest, even if they’re technically different. Some negotiators share this concern, believing this is the central issue with the proposed legislation.

As of today, one XRP, the cryptocurrency linked to Ripple, costs $1.41. This is a 2.5% increase from its price a week ago.

Read More

2026-05-06 09:05