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    Writer by choice, CryptoCurrency Writer, and Researcher by chance. Currently, focusing on financial news and analysis, as well as cryptocurrency news and data. One may not call me a crypto โ€œEnthusiastโ€ but trust me I'm getting there.

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    Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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  • 2 minutes read

Ripple News: Can the Clarity Act Push XRP to New Highs?

Story Highlights
  • The Clarity Act could unlock institutional adoption of XRP with clear crypto regulations and permissioned DEXs for banks.

  • Crypto treasury firms and Rippleโ€™s escrow strategy may drive XRP scarcity, boosting demand and potential price growth.

The crypto world has been waiting years for clear rules, and now it looks like they might finally arrive. U.S. Senator Cynthia Lummis recently hinted that the Clarity Act could be passed as early as October.

Why This Matters for XRP

In an interview with Paul Barron, crypto analyst Zach Rector says the Clarity Act could be the turning point for XRP adoption. He explained that big institutions with trillions of dollars to tokenize and move on-chain have been sitting on the sidelines because the rules were too murky. Once the Clarity Act clears up who regulates what and how DeFi providers can operate, those excuses disappear.

โ€œThis is the big unlock. ETFs should be live, companies could start putting crypto on their balance sheets, and institutions will finally feel safe using the XRP Ledger,โ€ Rector said. 

Permissioned DEXs: A Safer Path for Banks

One of the biggest innovations tied to XRP is the idea of permissioned decentralized exchanges (DEXs). Regular DEXs are open to anyone, which is a problem for banks that need to avoid sanctioned or shady players. A permissioned DEX solves this by letting only verified participants join the pool.

Rector gave an example, โ€œIf SWIFT wanted to do a permission DEX on the XRP Ledger, they could bring all 11,000 member banks and theyโ€™d be able to prove with credentials that theyโ€™re supposed to be in that liquidity pool. That is what institutions have been waiting for.โ€

This setup would allow banks and payment companies to use the same technology as the public XRP community, but in a way that fits strict compliance rules.

The Rise of Crypto Treasury Companies

Another factor that could boost XRP is the rise of crypto treasury companies. These firms hold digital assets like XRP on their balance sheets. By locking away large amounts of tokens, they can create scarcity and sometimes spark what analysts call a โ€œsupply shock.โ€

There are already a few treasury companies looking at XRP, with Arrington XRP Capital making a move in this direction. If more follow, it could put even more upward pressure on XRPโ€™s price. At the same time, Rector warned that these firms can also be risky. โ€œThey are bullish for adoption, but if they overextend, they could end up triggering the next market correction.โ€

No More Excuses

Ripple itself has acted as a de facto treasury for years, holding billions of XRP in escrow and releasing it gradually. With the SECโ€™s stance softening and the Clarity Act potentially passing within weeks, the landscape for XRP could change fast.

Rector put it simply: โ€œAfter this, there are no more excuses. If a project does not grow, it is not about regulation anymore.โ€

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FAQs

What is the Clarity Act?

The Clarity Act is proposed U.S. legislation to create clear regulatory rules for cryptocurrencies, potentially unlocking institutional adoption.

How could the Clarity Act help XRP?

It provides regulatory certainty, encouraging large institutions to use the XRP Ledger for tokenizing and moving assets at scale.

Why are crypto treasury companies important for XRP?

They hold large amounts of XRP, potentially creating scarcity and upward price pressure through a supply shock.

What is the main obstacle to XRP adoption?

Analysts state that murky regulation has been the primary barrier, which the Clarity Act aims to remove, leaving no more excuses.

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