The XRP ecosystem is currently navigating two critical developments that hold significant weight for institutional investors: evolving regulatory frameworks in the United States and a pivotal technical upgrade to its underlying ledger. Both initiatives address a core challenge—achieving legal clarity and building infrastructure that meets compliance standards. The central question for the market is the timeline for these efforts to meaningfully open doors for regulated capital.

Infrastructure Milestone: Permissioned Domains Nears Activation

On the technical front, the XRP Ledger (XRPL) community is preparing for a major protocol amendment. The “Permissioned Domains” feature, designed to facilitate regulated access to the network’s liquidity, has reportedly secured approval from 88.24% of validators. Its activation is tentatively scheduled for February 4, 2026.

This upgrade aims to bridge a key gap for professional investors. It provides a pathway for institutions to interact with the XRPL without necessarily routing transactions through public, decentralized exchanges—a process that often raises compliance complications. By enabling credentialing and permissioned access, the amendment seeks to lower a significant barrier to institutional adoption.

The Legislative Landscape: CLARITY Act Faces Hurdles

Concurrently, legislative efforts in Washington are being closely monitored. The proposed “Digital Asset Market CLARITY Act” represents a comprehensive market structure bill that could provide substantial legal definition. Crucially for XRP, the draft legislation would explicitly classify it as a non-security, potentially resolving years of regulatory ambiguity that have deterred larger investors.

However, the bill recently encountered a setback. A planned markup session in the Senate Banking Committee scheduled for January 15 was postponed following the withdrawal of support from Coinbase CEO Brian Armstrong. Concerns were reportedly raised over provisions related to tokenized securities and decentralized finance (DeFi), as well as rules that would prohibit crypto firms from offering interest on stablecoin holdings.

The legislative process is further complicated by the presence of more than 130 proposed amendments, covering topics from stablecoin yield regulations to ethics guidelines for government crypto investments. Despite these delays, Ripple CEO Brad Garlinghouse expressed optimism at the World Economic Forum in Davos, stating that regulatory clarity for the industry is “closer than ever.”

Should investors sell immediately? Or is it worth buying XRP?

Ripple’s Strategic Expansion into Traditional Finance

Beyond protocol and policy, Ripple continues to build bridges with the conventional financial system. In December 2025, the company received conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) for a national trust bank charter (Ripple National Trust Bank). Furthermore, an application for a Federal Reserve master account is pending; approval would grant direct access to the FedWire and FedNow payment systems.

On the product side, Ripple is focusing on enterprise solutions. The company, in partnership with GTreasury, announced “Ripple Treasury,” an infrastructure platform designed to integrate traditional cash management processes with digital asset systems. Meanwhile, its stablecoin, RLUSD, launched in December 2024 and listed on Binance as of January 22, 2026, has surpassed a market capitalization of $1.3 billion according to CoinMarketCap data.

Market Snapshot: ETF Inflows Contrast with Price Weakness

Institutional interest is already manifesting through investment vehicles. XRP spot exchange-traded funds (ETFs), which launched in November 2025, have seen notable traction. Reports indicate cumulative inflows have exceeded $1.3 billion, with a streak of 43 consecutive trading days of positive flows. Analysts note, however, that this scale remains modest compared to established Bitcoin and Ethereum ETF products.

This institutional interest stands in contrast to current price action. Trading at $1.79, XRP has touched a fresh 52-week low. A Relative Strength Index (RSI) reading of 28.8 suggests the asset is in significantly oversold territory.

Key Dates and Forthcoming Catalysts

Several near-term events are poised to influence XRP’s trajectory:

• February 4: Anticipated live activation of the Permissioned Domains amendment on the XRPL.
• February 11: XRP Community Day, featuring appearances by Ripple executives Brad Garlinghouse and Monica Long.
• CLARITY Act: Ongoing negotiations and amendment processes within the U.S. Senate.
• Fed Master Account: A decision on Ripple’s application for direct Federal Reserve access remains outstanding.

The path forward appears dependent not on a single catalyst, but on the synchronized progress of both policy and technology. Should the CLARITY Act gain momentum and the XRPL upgrade perform as intended, the very compliance hurdles that have restrained institutional participation may begin to diminish.

Ad

XRP Stock: Buy or Sell?! New XRP Analysis from January 29 delivers the answer:

The latest XRP figures speak for themselves: Urgent action needed for XRP investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 29.

XRP: Buy or sell? Read more here...