XRP Could Become E-SDR if Ripple Cuts Holdings Below 20%: Analyst

• UnknowDLT suggests Ripple must reduce holdings below 20% under CLARITY Act terms.
• Ripple currently controls approximately 42-50% of XRP’s 100 billion token total supply.
• CLARITY Act passed in July, establishes a 20% threshold for commodity classification.

Crypto analyst UnknowDLT has shared a theory linking XRP’s potential classification as an electronic Special Drawing Right to Ripple’s token holdings. The analyst suggests that once the CLARITY Act receives approval, Ripple must hold under 20% of XRP’s supply to avoid security classification.

According to UnknowDLT, Ripple could transfer a portion of its holdings to the U.S. government to achieve compliance. The analyst argues this would allow the International Monetary Fund to set XRP’s price, as the IMF can only adopt assets first adopted by nations. “XRP IS THE NEW E-SDR,” the analyst stated. He also predicted the price would “explode on the same day” if this scenario materializes.

CLARITY Act establishes ownership limits

The Digital Asset Market Clarity Act of 2025 passed the U.S. House of Representatives on July 17, 2025. The legislation establishes criteria for digital assets to qualify as “digital commodities” under CFTC jurisdiction rather than securities under SEC oversight.

A critical component for achieving “mature blockchain system” status involves ownership concentration limits. The Act specifies that for classification as a mature system with its token as a digital commodity, “no digital commodity issuer, digital commodity related person, or digital commodity affiliated person beneficially owns, in the aggregate, 20 percent or more of the total amount of units.”

This 20% threshold aims to prevent excessive centralization and ensure distributed control over blockchain networks. Ripple Labs currently holds approximately 45-50% of XRP’s total 100 billion supply when combining escrow accounts and operating wallets.

Ripple’s escrow accounts contain 40-45% of supply and is roughly 35-40 billion XRP locked in escrow. Treasury and operating wallets hold an additional 5-6% of supply. Combined, Ripple controls approximately 42-50% of total supply, far exceeding the CLARITY Act’s 20% threshold.

UnknowDLT’s theory suggests that by transferring holdings to reduce Ripple’s ownership below 20%, XRP could gain eligibility for IMF adoption as an electronic Special Drawing Right. The analyst predicts this development would cause a rush of capital into XRP as investors move speculative assets into the token.

The Special Drawing Right currently functions as an IMF reserve asset based on a basket of currencies including the U.S. dollar, euro, Chinese yuan, Japanese yen, and British pound. The concept of an electronic or digital SDR has been discussed in international finance circles as central banks explore digital currency frameworks.

Voluntary reduction of its holding to below 20% remains speculative. Such a move would require transferring approximately 22-30 billion XRP, depending on current exact holdings. 

Related: https://coinedition.com/ripple-cto-strikes-back-after-analyst-says-xrp-has-no-real-use/