Lawmakers in the U.S. Senate continue to work through the Clarity Act, but one section of the bill could force Ripple to cut down its large XRP escrow holdings.
As the bill moves forward, the XRP community has continued to speculate how Ripple plans to respond if regulators require the company to hold less than 20% of all XRP for the asset to qualify as a commodity. Notably, community commentator Mack Attack recently presented several possibilities.
The Clarity Act’s 20% Holding Threshold
For context, the Digital Asset Market Clarity Act of 2025 (the Clarity Act) highlights specific conditions that define a “mature blockchain system.” One of these requirements focuses on ownership.
Specifically, a blockchain system must show broad distribution and ensure that no single person, group, or related entities under common control own 20% or more of the token supply or hold equivalent governance power.
Lawmakers designed this rule to confirm decentralization, reduce concentrated influence, and determine when a digital asset should shift from SEC rules to CFTC oversight.
If any single party under common control holds 20% or more, the system fails the maturity test and remains under securities regulations with added disclosure and anti-manipulation obligations. That holder would also qualify as a “blockchain control person,” which brings additional restrictions.
Ripple’s Dilemma
Mack Attack pointed out that Ripple currently holds more than 34.4 billion XRP in escrow, a number far above the 20 percent threshold. For perspective, with XRP’s total supply sitting at 99.9 billion, Ripple’s 34.4 billion balance represents 34.4% of the total supply.
According to Mack Attack, this raises a direct question: “Would Ripple need to divest, move, or remove more than 14 billion XRP to comply once the bill becomes law?”
Will Ripple Divest, Sell, or Burn 14B XRP?
The pundit noted that speculation about that path has grown quickly. Notably, some believe Ripple might sell the excess XRP to large institutions such as hedge funds or financial firms that want long-term exposure or liquidity support.
However, others think Ripple may eventually reveal that parts of the escrow already sit under the control of outside parties, meaning Ripple only manages the accounts rather than owns them.
Under this idea, the company would have sold future escrow rights instead of releasing tokens directly into the market. Interestingly, Ripple CTO David Schwartz confirmed that this was a possibility while responding to community inquiries in October 2025.
Another theory suggests that Ripple might destroy a portion of the supply to tighten circulation, although this remains highly unlikely. Schwartz has also commented against this idea, suggesting that it would be a waste of the funds.
Meanwhile, Mack Attack pointed out that a more gradual option would involve slow, steady sales over many years, similar to the monthly escrow system Ripple already uses, where it releases 1 billion XRP and returns most of it afterward.
6/🧵
Controlled, long-term market sale: Another possibility is a very gradual sale over many years via the open market, in a way that impacts the price as little as possible, similar to how they now manage the monthly 1 billion XRP (most of which is put back into escrow).
— 🇳🇱 MackAttackXRP 🇳🇱 (@MackAttackXRP) December 10, 2025
Wild Speculative Claims
The community has also witnessed some wild claims. For instance, some individuals suggest that Ripple has already assigned the roughly 1,700 NDA contracts created since 2017 to major institutions, governments, or international bodies such as the IMF.
According to this belief, Ripple only acts as the administrator. Once the Clarity Act becomes law, those arrangements could surface and instantly spread XRP ownership without large market moves.
Per Mack Attack, another rumor claims that global financial organizations or leading governments may plan to use XRP for digital versions of Special Drawing Rights (SDRs), which would give the asset a role in international finance.
A different version suggests Ripple might transfer part of its holdings to the U.S. government or a federal crypto reserve under the next administration, which some believe could trigger a surge in market interest.
Others argue that Ripple could restructure the entire escrow system, stop the monthly releases, and place control in the hands of independent entities, which would speed up decentralization and make XRP more appealing to institutional products like ETFs.
Suggestions from Brad Kimes and EGRAG
Responding, community commentator Brad Kimes of Digital Perspectives added that Ripple may have already used option contracts to pre-allocate large amounts of XRP to major players, similar to earlier deals with R3 and Greg Kidd.
What if this requirement is not an issue because we find out Ripple doesn`t own the majority of the XRP escrow because they preallocated option contracts to the biggest players around the world?
You know,the same way they did preallocated option contracts for
R3 5 Billion XRP… https://t.co/YSlRqNd14r— Digital Perspectives (@DigPerspectives) December 10, 2025
Meanwhile, market analyst EGRAG Crypto pointed to Evernorth, a new XRP treasury company backed by Ripple, as another potential avenue for reducing Ripple’s direct holdings. However, all these claims remain highly speculative until Ripple confirms its plans for the escrow balance.
Notably, the Clarity Act passed the U.S. House earlier this year with strong bipartisan support. The Senate received the bill in September and sent it to the Committee on Banking, Housing, and Urban Affairs. It remains there while lawmakers discuss competing proposals such as the Responsible Financial Innovation Act.
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