CLARITY Act Update for XRP Holders: Ex-House Committee Chairman Sets Major Timeline

The CLARITY Act has picked up a notable endorsement. Patrick McHenry, former Chairman of the House Financial Services Committee, told Bloomberg he expects the bill to pass before the year ends.

What He Said About the Banking Industry

Much of McHenry’s commentary focused on the banking lobby’s opposition to the bill. He described the current lobbying effort as a last-ditch push to preserve political power. Banks have been raising objections at town hall meetings during the August recess, targeting lawmakers while they are home and away from Washington.

🇺🇸 HUUUUGE: FORMER HOUSE FINANCIAL SERVICES COMMITTEE CHAIRMAN PATRICK MCHENRY SPEAKS TO BLOOMBERG:

The central argument banks are making is that stablecoin yield products will trigger a mass exodus of deposits away from traditional banks. McHenry rejected that claim. He pointed out that stablecoin yield products have existed in the marketplace for four to five years without any evidence of deposit flight. He also cited studies from universities and the Federal Reserve to support his position.

He went further and connected the banking industry’s opposition to a longer pattern. He noted that the U.S. now has 2,000 fewer banks than it did before the financial crisis, and argued that the banking lobby has done nothing meaningful to address the rising cost of operating a bank. In his view, crypto has become a convenient target for an industry trying to hold itself together politically.

A Comparison to Money Market Funds

McHenry drew a parallel to the early 1980s, when Fidelity introduced money market mutual funds and banks fought hard against them. Banks eventually lost that battle and began offering the product themselves.

He predicted the same outcome for stablecoin yields, saying consumers will be able to earn a return on stablecoin products and that banks will ultimately follow the market. “You’re going to see a changed universe for banks,” he said, after the CLARITY Act passes.

What This Means for the Vote

The September 15 cloture vote is the immediate test. Republicans have 53 confirmed votes. The bill needs 60 to advance, which means 7 Democrats must cross over. McHenry expressed confidence that the banking lobby’s summer push will not move those votes. “It’s falling on deaf ears,” he said of the industry’s efforts.

The CLARITY Act establishes a regulatory framework for digital assets, including tokens like XRP. A successful cloture vote would move the bill toward final passage, giving the crypto market the legal clarity it has waited for years. McHenry believes that moment will come before the year ends.