The Financial Innovation and Technology for the 21st Century Act (H.R. 4763, colloquially “FIT21”) is still only a bill before the US House, but it has already become a litmus test for whether blockchain networks like the XRP Ledger can be considered truly “decentralized” under US law. In a thread on X, Al-Amin AlBakry—co-founder and chief business and strategy officer of SurferMonkeyHQ and founder of Money GCC Project Management Services—contends that the XRP Ledger cannot clear that bar.
“No it doesn’t. I’ve actually read the entire thing,” AlBakry wrote, responding to a claim that XRP would benefit from FIT21’s decentralization presumptions. He went on to say that, “based on the criteria outlined in H.R. 4763—the Financial Innovation and Technology for the 21st Century Act—Ripple (XRP) appears unlikely to meet the decentralization standards defined in the bill.”
Is XRP Decentralized According To FIT21?
AlBakry’s reading of FIT21 focuses on six temporal and quantitative prongs that must be satisfied before a blockchain may boast the label “decentralized.” Over the prior twelve months, no single entity can have wielded unilateral authority over the network; neither the issuer nor its affiliates may have owned more than twenty percent of the circulating supply; and none may have held twenty-percent voting power in protocol governance.
Code commits initiated by the issuer during the preceding three months must be limited to maintenance or security and approved through a community process, while any token issuances in the past year must have been fully programmatic. In addition, marketing activity in the prior quarter must not have promoted the token as an investment vehicle.
AlBakry argues that Ripple Labs—whose monthly escrow releases still leave the company holding approximately half of the nominal 100 billion XRP supply—fails at multiple junctures. He notes Ripple’s historical influence over software changes, its ability to sway validator selection through the company-maintained Unique Node List, and its long-running promotional campaigns aimed at banks and cross-border-payment providers.
“These factors suggest that Ripple may not satisfy the decentralization criteria,” he wrote, before adding that FIT21 “does address the treatment of escrowed or locked tokens, but it does not provide explicit exceptions for them when assessing decentralization.”
The critique landed squarely in the path of Jungle Inc Crypto News (@jungleincxrp), a well-followed XRP commentator who had called FIT21 a “Big Win for Ripple if Passed” because section 102 of the bill ostensibly “excludes tokens that are locked in smart contracts or escrow arrangements” from the insider-ownership calculation. In Jungle Inc’s reading, the roughly forty-plus billion XRP held in Ripple’s time-locked escrow could therefore be ignored when tallying insider control, pushing Ripple below the twenty-percent threshold and allowing the ledger to be “presumed to be decentralized and not under the control of an issuer.”
Jungle Inc doubled down moments later, insisting that “escrowed tokens are not considered ‘beneficially owned.’ Ripple has no control over the release of these funds.” AlBakry, unmoved, replied: “If you’re so confident, post the part of the bill that says that.” At the time of publication, Jungle Inc had not provided the requested statutory excerpt.
At press time, XRP traded at $2.10.
