A draft of the Senate CLARITY Act could reshape how major cryptocurrencies are regulated in the United States. The proposal would place assets such as XRP, Solana, and Dogecoin on a similar legal footing as Bitcoin and Ethereum.
That shift matters because legal classification influences which institutions can participate. Clearer rules could also reduce compliance uncertainty for US-based crypto firms and trading platforms.
Senate Banking Committee Chairman Tim Scott released the draft text, which draws a line between “ancillary” and “non-ancillary” digital assets. The framework aims to clarify when a token should not be treated as a security.
Under the draft, tokens deemed non-ancillary would be excluded from securities classification. Consequently, they would not face Securities and Exchange Commission (SEC) registration and disclosure requirements.
The language targets a long-running industry concern about enforcement risk. Supporters argue it would replace regulation-by-enforcement with a rules-based approach set by statute.
A key feature is an objective threshold tied to regulated market products. A token would qualify as non-ancillary if, on January 1, 2026, it is the principal asset of a spot exchange-traded product (ETP) listed on a US national securities exchange.
The draft links this standard to the precedent applied to Bitcoin and Ethereum. Both assets underpin approved US spot ETPs, and the proposal uses that model as a gateway.
The draft frames product eligibility as a route to regulatory certainty. In addition, it suggests that tokens tied to listed ETPs could gain a clearer compliance posture from the law’s effective date.
Based on current ETP listings and regulatory filings referenced in the discussion around the draft, several assets could qualify. The list cited includes XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink.
If enacted, those tokens would receive similar regulatory treatment to Bitcoin and Ethereum under this framework. That outcome could reduce uncertainty for exchanges, investors, and institutional market participants operating in the US
Supporters say the change could remove a persistent obstacle to institutional participation. Meanwhile, the draft’s impact would likely be felt first in internal compliance decisions rather than immediate trading behavior.
One industry participant described that distinction directly. Jordan Jefferson, founder of DogeOS, said the immediate impact would be “less about prices and more about compliance posture,” while adding that clearer rules can widen the set of institutions “allowed to engage.”
Another observer tied the proposal to how tokens interact with regulated distribution channels. Jamie Elkaleh, chief marketing officer (CMO) of Bitget Wallet, said the bill reflects a shift toward regulating crypto assets based on how they are distributed and used within regulated financial products.
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The draft’s backers argue the structure could deepen liquidity and support broader participation. Furthermore, they say removing securities-classification risk could reduce legal exposure for US crypto firms.
A lawyer cited in reaction to the draft linked the approach to earlier market dynamics. Joshua Chu, a lawyer and co-chair of the Hong Kong Web3 Association, said tying non-ancillary status to ETPs would likely place XRP, SOL, and DOGE in a “compliance comfort zone” similar to Bitcoin and Ethereum.
Still, the draft text also highlights political uncertainty around final passage. Chu described US politics as the “wild card,” and he linked the bill’s fate to the upcoming midterm elections.
The draft also signals broader trade-offs in crypto regulation. It includes a section protecting software developers, described as a nod to decentralized finance (DeFi) interests.
Another contested area appears to be stablecoin policy. The discussion around the draft notes the omission of a disputed provision on stablecoin yield, and it references language that would bar stablecoin interest payments.
The proposal’s next test is procedural and immediate. The Senate Banking Committee is scheduled to debate and potentially amend the bill in a markup hearing this Thursday.
For now, the Senate CLARITY Act draft remains a draft, and its final language is not settled. The committee debate and any amendments will determine whether the non-ancillary framework survives into the version that advances.