The debate in the US Senate over a bill called the Clarity Act has reignited the discussion XRP and other crypto products, and how they might be treated under US rules.
Related reading
Reports have suggested that the bill could give clearer status to tokens that back US-listed ETFs, moving them closer to commodity treatment.
XRP spot ETFs have also attracted a lot of capital, with inflows of about $1.37 billion since their launch in November 2025 – a figure that underlines why lawmakers and market observers are paying attention.
How it works
Creation and redemption ETFs can be done ‘in kind’, meaning the fund can accept the actual asset in lieu of cash.
That mechanism is real, but it doesn’t allow regular buyers to load tokens directly into a fund. Authorized participants – large broker-dealers and market makers – are the ones who hand over tokens to ETFs and receive shares back.
Everyday investors buy or sell ETF shares on stock exchanges. That gap is at the center of the debate over whether an ETF could ever function like a bank.
The XRP ETFs are also In-Kind Funds, so you can deposit XRP directly into the fund in exchange for the exact value in shares.
Most will generally choose this option after the introduction of the law. This has many advantages: you can use the ETF as a “bank”. https://t.co/2G49kxUpGc pic.twitter.com/4fyeOkEYTC
— Chad Steingraber (@ChadSteingraber) January 13, 2026
What community voices say
According to reports from XRP community figures, some see a future where ETFs act as a regulated parking lot for token holders.
Chad Steingraber has spoken out about the in-kind mechanisms, arguing that investors could swap XRP for matching ETF shares and treat the funds as a safer place to hold value until they need to move tokens again.
These comments have helped popularize the idea that ETFs can be used in a bank-like manner.
What taxes could look like
Reports and investor guides show that ETF structure matters for taxes. ETFs often use in-kind creation and redemption to avoid routine capital gains distributions at the fund level, which in many cases makes ETFs tax efficient.
But the tax implications for token holders depend on how transactions are executed and the legal structure of the product.
Under current US rules, transfers that change the form of an asset can trigger taxable events for the person transferring the asset, and fund-level distributions can still trigger tax bills for investors.
Related reading
According to Chad Steingraber, the in-kind structure gives XRP holders a regulated place to park their tokens if they want security and oversight.
Investors, Steingraber believes, could one day favor ETFs Clarity Act clarifies rules. The appeal lies not in the technical steps, but in the confidence of holding XRP in a regulated, organized product. For him, ETFs offer a more secure way to manage tokens while still having access to them when needed.
Featured image from Unsplash, chart from TradingView