US Senate Bill Could Transform XRP ETFs Into Bank-Like Structures

The US Senate is debating the Clarity Act, impacting XRP and similar crypto products by potentially giving them a commodity-style status under US rules.

The bill could clarify the status of tokens backing US-listed ETFs, drawing investor attention due to substantial capital inflows into XRP spot ETFs, totaling about $1.37 billion since November 2025.
ETFs allow creation and redemption "in kind," where authorized participants exchange tokens for ETF shares without involving cash.
This process does not allow ordinary investors to deposit tokens directly but raises questions on whether ETFs might function like banks.

Community Perspectives

XRP community members suggest ETFs could serve as regulated storage for token holders.
Chad Steingraber highlights that in-kind mechanics enable exchanging XRP for ETF shares, offering a secure value-holding method.

Tax Implications

ETFs often use in-kind transactions to avoid capital gains distributions, enhancing tax efficiency.
However, legal structure and transaction execution determine tax consequences for token holders.
Asset form changes may trigger taxable events, affecting investor tax liabilities.

Steingraber asserts that ETFs provide a regulated environment for XRP holders, offering safety and oversight. Investors may favor such ETFs once the Clarity Act clarifies regulations, as they offer a structured way to manage tokens while maintaining access when needed.