Does the CLARITY Act Die on January 3? What That Means for XRP

A midterm shift in Congress and two high-profile House losses have left crypto's biggest bill on a ticking clock. One lawyer says the calendar could decide XRP's regulatory future before the new year arrives.

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Following the November 2026 midterm elections, Democrats gained control of both chambers of Congress, which one industry lawyer warns could put the CLARITY Act—a crucial crypto market-structure bill for XRP (CRYPTO: XRP)—at risk. This bill has been stalled in the Senate since September, and the lawyer says it could lapse on January 3, 2027, the date the new Congress is seated. Additionally, two key House representatives who strongly supported the crypto industry lost their seats.

In early trading, Coinbase (NASDAQ: COIN | COIN Price Prediction) fell 4.1% to $145.23, while XRP traded at $1.28, down 1.8% over the previous 24 hours, reflecting a broader sell-off in crypto stocks after the election results. So, will the CLARITY Act expire in just 59 days, and what does that mean for XRP?

What Passed, What Failed, and What Expires on January 3, 2027

The House approved the CLARITY Act, H.R. 3633, on July 17, 2025, with a vote of 294 to 134. However, the Senate did not bring it to a vote on the floor after a procedural motion on September 15, 2026, which fell short at 49 to 50—ten votes below the 60 needed. The bill stalled over disagreements about ethics rules on officials’ crypto holdings and how to treat stablecoin yields, the interest payments on dollar-pegged tokens.

Abhishek Vaidyanathan, chief legal officer of the NEAR Foundation, noted in an email that the current version of the CLARITY Act “expires if it remains pending when the new Congress is seated on January 3.” He suggested it is realistic to assume any market structure legislation will be delayed until 2027, with a slim chance of moving forward during the lame-duck session—the period before the new Congress begins.

Fairshake, the crypto industry’s primary political fund, invested about $1 million to support Rep. Bill Huizenga, vice chair of the House Financial Services Committee, who lost to Sean McCann. Rep. Bryan Steil, chair of the digital assets subcommittee, also lost. Rumor has it that Maxine Waters is poised to chair the full committee next term.

Coinbase Faces Regulatory Uncertainty, and XRP’s Impact Remains Unclear

As the largest U.S.-listed crypto exchange, Coinbase has a market value of around $32.6 billion. Federal regulations could significantly affect its spot trading, derivatives, stablecoins, event-contract markets, and tokenized stocks. A market-structure law was anticipated to provide consistent federal rules across many of these areas.

During the earnings call on October 29, 2026, CEO Brian Armstrong praised the recent passage of the GENIUS Act but notably did not mention the CLARITY Act. In the third quarter, Coinbase’s revenue fell 35% to $1.2 billion, and shares were down 35.8% year to date. The exchange does not disclose how much of its revenue comes from XRP trading, making it difficult to gauge the potential benefits for XRP if the bill passes.

Regulatory Agencies Continue Their Work After Senate Stalemate

Despite the Senate’s lack of progress, the SEC and CFTC have continued to make strides. The CFTC recently submitted a crypto rulemaking proposal to the White House, based on the joint guidance from the SEC and CFTC issued in March 2026, which categorizes tokens. Still, it may take more than a year to establish binding regulations.

Ripple CEO Brad Garlinghouse expressed optimism on social media after the November 2026 results, stating, “Pro-crypto members won on both sides of the aisle… and the 67 million (and growing) Americans using crypto aren’t going anywhere.” At the time, XRP was trading around $1.32. As Ripple is a private company closely associated with XRP, Garlinghouse had a vested interest in remaining positive. Vaidyanathan, the lawyer who discussed the deadline, also works for a crypto foundation affected by the outcome.

Does the CLARITY Act Expire on January 3, 2027?

The current version of the CLARITY Act appears likely to lapse on January 3, 2027, as it has already failed its initial Senate vote, and no new vote has been scheduled. This outcome suggests that clear federal guidelines for XRP will be delayed.

If the Senate schedules and passes a cloture vote—the motion to end debate—before the January 3 deadline, the bill could advance. If not, any efforts to draft regulations would need to restart from square one under a Democratic Congress, pushing the timeline for a specific rulebook for XRP even further out.

CLARITY Act XRP FAQ

What Is the CLARITY Act?

It’s a legislative proposal that would divide oversight of crypto assets, giving the CFTC authority over digital commodities and the markets that trade them, while the SEC retains control over digital securities.

When Is the CLARITY Act Vote?

No vote date has been set yet.

What Does the CLARITY Act Mean for XRP?

If regulators classify XRP as a digital commodity, the CLARITY Act could provide it with a permanent federal framework. Currently, XRP is trading at 64.9% below its all-time high of $3.65.

Contact [email protected] for any questions or corrections.

Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.