Ripple may release 1B XRP monthly if CLARITY Act passes

An SEC filing for the Cryptex Digital Market Cap ETF indicates Ripple could release up to 1 billion XRP monthly from escrow if the CLARITY Act passes, potentially doubling the token's net supply growth from the current 200-400 million XRP per month.

Australian lawyer Bill Morgan flagged the language in an X post on Aug. 26, saying he could not recall Ripple making such a statement and questioning the source cited in the prospectus. "It cites that Ripple has indicated that if regulatory clarity is established, it may release additional XRP from escrow," Morgan wrote.

Ripple created its escrow system in December 2017, locking 55 billion XRP into time-based smart contracts on the XRP Ledger. Under the current structure, up to 1 billion XRP is released on the first day of each month. Ripple has historically re-locked 60-80 percent of each release into new escrow contracts, resulting in a net monthly increase of roughly 200-400 million XRP in circulation.

If Ripple retains the full monthly release, the additional supply could create sustained downward pressure on XRP unless demand grows at a similar pace. The filing links any increase to liquidity needs for stablecoin and FX trading pairs on the XRP Ledger, suggesting higher network activity could absorb the extra tokens.

Escrow mechanics limit early unlocks

The phrase "release additional XRP from escrow" could suggest Ripple can withdraw locked tokens ahead of schedule, but the XRP Ledger's rules do not permit early release from time-based escrow contracts. An EscrowFinish transaction fails when its programmed FinishAfter time has not passed, a restriction enforced through the ledger rather than Ripple's internal policies.

Ripple originally created 55 escrow contracts containing 1 billion XRP each. One scheduled batch becomes available monthly. Ripple can use some of that XRP and place the remaining portion into new escrow contracts with later release dates. The Cryptex filing may therefore mean Ripple could retain more from scheduled monthly releases rather than unlocking tokens early.

CLARITY Act timeline remains uncertain

The CLARITY Act would establish federal rules dividing digital-asset oversight between the SEC and the Commodity Futures Trading Commission. The Senate Banking Committee advanced the legislation by a 15-9 vote in May. Senate Majority Leader John Thune later filed cloture on the motion to proceed, with the cloture motion set to ripen Sept. 15 at 2:15 p.m. — a procedural step, not a final passage vote.

XRP was trading at $1.42 at press time, down more than 5 percent over the past 24 hours but up over 40 percent on the weekly chart. The token's recent rally has been supported by nine consecutive days of net inflows into U.S. spot XRP ETFs, totaling $1.59 billion, with Bitwise leading at $11.02 million on Aug. 25.

The next verifiable development would be a direct statement from Ripple explaining whether it plans to distribute more of its scheduled monthly XRP releases. Future on-chain transactions could also show whether Ripple reduces the amount placed back into escrow. Until Cryptex identifies its source or Ripple confirms the policy, the statement should be treated as an issuer claim rather than evidence of a planned XRP supply change.

This article is for informational purposes only and does not constitute investment advice.