[DigitalToday reporter Yoonseo Lee] An analysis said a “Clarity” bill being discussed in the U.S. Congress could be a key variable in expanding institutional adoption of XRP.

On July 23, local time, blockchain outlet The Crypto Basic reported that software developer Vincent Van Code said XRP’s legal status has become clearer than before, but regulatory uncertainty still remains for large financial institutions to move.

Van Code assessed that a U.S. district court ruling in the 2023 lawsuit between the Securities and Exchange Commission (SEC) and Ripple significantly reduced legal uncertainty. The court ruled at the time that XRP sales on the secondary market are not securities. He said the ruling affected Ripple’s expansion of its On-Demand Liquidity (ODL) service, bank pilot programs, XRP spot exchange-traded funds (ETFs) and broader custody support.

Van Code, however, cited as a limitation that the Ripple ruling was not federal law and amounted only to a U.S. federal district court decision. He pointed out that the SEC could take a different stance in future enforcement cases, and that there remains a possibility the existing view could narrow or be reviewed depending on later court decisions or a change in administration.

Large financial institutions are still moving conservatively. Van Code saw that many institutions demand “clear legal guidelines” before putting large capital to work or integrating digital assets into core financial products. He said banks and traditional financial institutions, with conservative compliance standards, are hesitating to hold large XRP positions or create major products based only on a court ruling.

Institutional activity related to XRP is also staying in relatively lower-risk areas. Van Code said some institutions are limiting involvement with XRP to non-custodial services, pilot programs or experimental use cases. He argued that if the Clarity bill passes, it could resolve a significant portion of the remaining regulatory uncertainty cited by such institutions, and as a result institutional adoption of XRP could broaden further.

He stressed, however, that he did not view the Clarity bill as directly affecting XRP’s price. The focus is not price levels but how far institutional participation can be expanded by putting the framework in place.

Discussions over the bill are also gaining speed. In the U.S. Senate, last-minute talks are continuing to pass a cryptocurrency market structure bill before the August recess. A recently circulated draft of the Clarity bill includes a controversial ethics provision. It would bar the president and other senior officials from directly investing in cryptocurrencies until 2029 and have the Justice Department enforce it.

Republicans argue the provision reflects an agreement with U.S. President Donald Trump. Some Democrats, by contrast, see the restrictions as insufficient, and some lawmakers have not yet decided whether to back the bill. To clear the Senate, it must meet the 60-vote threshold, making it likely to need at least 10 Democratic votes.

In addition to the ethics provision, the bill includes expanded consumer protection and measures to overhaul standards for regulating digital assets. It also includes provisions to set rules for cryptocurrency exchanges, support tokenised securities, and not apply money transmitter regulations to DeFi developers who do not control customer funds.

Republican leadership is expected to bring the bill to the Senate floor soon. With the August summer recess approaching, the coming weeks are expected to be the last de facto chance to pass the bill.

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