Ripple's CEO Says the CLARITY Act Has a 90% Chance of Passing by April — and It Would End Five Years of Crypto Regulatory Uncertainty in a Single Stroke

Five years ago, the Securities and Exchange Commission sued Ripple Labs, alleging that the company had sold XRP as an unregistered security. That lawsuit consumed half a decade of litigation, cost hundreds of millions of dollars in legal fees, and cast a regulatory shadow over the entire cryptocurrency industry that scared away institutional capital and left exchanges, custodians, and asset managers operating in a state of perpetual legal uncertainty.

On February 20, 2026, Ripple CEO Brad Garlinghouse told a financial industry audience something that the cryptocurrency market has been waiting years to hear: the CLARITY Act, the most comprehensive piece of digital asset legislation ever introduced in the United States Congress, has a 90% probability of passing by April. If he is right, the regulatory era that the SEC lawsuit helped create is about to end, and a new era of institutional-grade crypto investment is about to begin.

What the CLARITY Act Actually Does

The CLARITY Act is not a narrow piece of legislation. It is a comprehensive framework designed to resolve the foundational question that has paralyzed the U.S. digital asset industry for the better part of a decade: when is a cryptocurrency a security subject to SEC oversight, and when is it a commodity subject to CFTC regulation?

The act establishes clear criteria for classifying digital assets, creates a registration pathway for crypto exchanges that want to operate legally under federal oversight, provides consumer protection standards modeled on commodity futures regulations, and, critically, resolves the jurisdictional dispute between the SEC and CFTC that has produced years of regulatory arbitrage, conflicting enforcement actions, and legal uncertainty that has pushed U.S. crypto development offshore.

Under the CLARITY Act's framework, most digital assets, including Bitcoin, Ethereum, and XRP, would be classified as commodities rather than securities, removing them from SEC jurisdiction and placing them under a more workable regulatory regime at the CFTC. Digital assets that have characteristics of traditional securities, including those that represent claims on company revenues or governance rights, would retain their SEC classification but with a clearer framework for compliance than the current "we'll know it when we see it" approach that has characterized SEC enforcement.

Why Garlinghouse's Confidence Matters

Brad Garlinghouse has been one of the most politically engaged executives in the cryptocurrency industry for years, and his 90% confidence estimate should be understood in that context. Ripple has maintained extensive relationships with congressional staff on both the House Financial Services Committee and the Senate Banking Committee, which have joint jurisdiction over digital asset legislation. Garlinghouse's read of the legislative landscape reflects genuine intelligence about the bill's momentum, not wishful thinking.

The political dynamics that have shifted in favor of crypto legislation since 2024 are well documented. The industry mounted an unprecedented lobbying effort in the 2024 election cycle, donating to candidates of both parties who expressed support for regulatory clarity and opposing those who championed the SEC's enforcement-first approach. The congressional composition that resulted from that effort includes a larger bloc of crypto-sympathetic legislators than at any previous point in the industry's history.

"I have never been more confident in the legislative environment for digital assets. The CLARITY Act has 90% odds of passing by April. This is happening, and it will change everything about how institutional capital approaches this space."

Brad Garlinghouse, CEO, Ripple Labs

The White House has also signaled support for resolving the regulatory uncertainty, with the administration publicly criticizing the SEC's prior approach and indicating that a legislative solution would have executive support. Without the threat of a presidential veto, the political math for passage becomes significantly more favorable.

The XRP Case: From Defendant to Beneficiary

No cryptocurrency has more to gain from the CLARITY Act's passage than XRP. The five-year SEC litigation that Ripple survived, culminating in court rulings that XRP was not itself a security in programmatic sales, nonetheless left the token in a regulatory gray zone that limited its access to U.S. exchanges and institutional investors.

Passage of the CLARITY Act would resolve that ambiguity definitively. XRP would receive the same commodity classification that Bitcoin and Ethereum currently enjoy as a practical matter, enabling full relisting on U.S. exchanges that had delisted or restricted it, opening the door to XRP exchange-traded products similar to the Bitcoin and Ethereum ETFs that received approval in 2024, and allowing institutional custodians to hold and manage XRP without legal risk.

The market is already pricing in some probability of this outcome. XRP was trading near $1.41 on Thursday, supported by the resurgence of ETF inflows and the legislative momentum Garlinghouse described. If the CLARITY Act passes in April as he projected, analysts expect a significant repricing as institutional capital that has been waiting on the sidelines enters the XRP market for the first time without legal reservation.

Beyond XRP: The Industry-Wide Implications

The CLARITY Act's significance extends well beyond XRP or even the cryptocurrency market itself. Regulatory clarity at the federal level would unlock a wave of institutional product development that has been on hold for years.

Bank custody of digital assets has been legally complicated under current frameworks, limiting the ability of traditional financial institutions to offer crypto services to their existing clients. Pension funds and endowments have been reluctant to allocate to digital assets without clear regulatory safe harbors. Broker-dealers who want to offer crypto trading alongside traditional securities have faced compliance costs that made the business economically unattractive under the current patchwork of rules.

A comprehensive federal framework changes all of that simultaneously. The effect on institutional capital flows into the crypto market could be substantial. Analysts who study digital asset adoption estimate that passing the CLARITY Act would unlock between $500 billion and $1 trillion in institutional capital that is currently waiting for the regulatory environment to clarify before committing to meaningful digital asset allocations.

The Timeline and the Risks

Even with Garlinghouse's 90% confidence estimate, legislative timelines in Washington are never certain. Congressional calendars shift, other priorities compete for floor time, and the amendment process can introduce provisions that change a bill's political dynamics. The April timeline he cited assumes that committee markups proceed on schedule and that the Senate is willing to take up the House-passed version without significant modifications.

The primary risk to the CLARITY Act is not opposition from the Senate Banking Committee, where support appears solid, but rather procedural delays and the possibility that broader budget or appropriations fights consume the legislative calendar in a way that pushes the crypto bill's floor vote past April. If the timeline slips to June or July, the impact on market sentiment would be modest but temporary. If it slips past the August recess into a more politically charged fall environment, the probability of passage before year-end falls meaningfully.

Investors should treat Garlinghouse's 90% estimate as well-informed but not guaranteed. The correct posture is to be positioned for the base case of passage while understanding that a delay is possible and a failure, while now unlikely, is not impossible.

Positioning for a Post-CLARITY World

For investors thinking about how to position for the scenario Garlinghouse described, the implications cut across both the crypto market and the traditional financial sector. Crypto-native companies with large XRP holdings, Ripple itself and several OTC trading desks, would benefit most directly. Crypto exchange operators, particularly those that had delisted XRP and would be positioned to relist and recapture trading volume, are also significant beneficiaries.

In the traditional financial sector, banks and custodians who have been building the operational infrastructure for digital asset services but waiting for regulatory clarity would be able to launch those products with confidence. The publicly traded stocks of institutions with significant digital asset service ambitions have been trading at a discount to their potential precisely because of regulatory uncertainty. That discount should compress when clarity arrives.

The five-year crypto regulatory winter that the SEC lawsuit helped create may be ending. If Brad Garlinghouse's 90% confidence estimate proves accurate, April 2026 could mark the moment when the United States stopped punishing its crypto industry for existing and started competing for the institutional digital asset market it has been ceding to London, Singapore, and Dubai for the past half decade.