Clarity Act May Allow XRP ETFs to Function Like Banks

The Clarity Act, a crypto bill moving through the Senate, could let investors use XRP ETFs almost like banks.

The bill looks to clarify digital asset rules and maygive certain tokens lighter reporting requirements if they already back U.S.-listed ETFs, puttingXRP and several other assets closer to commodity treatment.

Notably, a recent interpretation from the community suggests that investors could treat XRP ETFs like flexible custodial accounts, suggesting that in-kind deposits allow them to move XRP directly into the funds and receive matching shares.

• XRP ETFs accept direct token deposits, allowing users to swap XRP for fund shares without converting to cash.
• The Clarity Act could give XRP and other ETF-backed tokens a regulatory status closer to commodities.
• If investors choose to deposit XRP directly into ETFs, this would allow them to treat the ETFs as banks.
• Depositing XRP into an ETF may trigger capital gains taxes under current IRS rules.
• XRP ETF inflows have reached $1.37 billion since launching in November 2025.

The idea that investors could treat these funds as banks came from XRP community pundit Chad Steingraber. He said these XRP ETFs accept direct deposits of XRP instead of requiring investors to convert their tokens into cash first. According to him, when someone deposits XRP, they receive ETF shares that match the value of what they put in.

Steingraber believes most people may choose this method once regulation becomes clearer with the passing of the Clarity Actbecause it lets them switch easily between holding their tokens themselves or holding shares inside a traditional investment product.

He suggested that, with this model, the XRP ETFs could act like a fully regulated avenue to store value, withdraw when needed, and move funds in and out, which is similar to how someone uses a bank account.

To him, investors could send their XRP into the ETF when they want safe, regulated exposure, then redeem shares back into tokens whenever they need to make payments or transfers on the XRP Ledger. In that sense, the ETF could act as a safe holding zone.

However, it is important to note that only authorized participants (APs) actually deposit tokens into in-kind ETFs. Regular investors cannot send XRP or any other asset directly to the fund. Instead, APs handle creation and redemption, taking in XRP and issuing new ETF shares, while everyday investors simply buy or sell those shares on the open market.

Also, even if this did work out, calling an ETF a bank stretches the comparison. Notably, ETFs can hold value and allow transfers, but they do not offer insured accounts, loans, or other core banking services. Whether U.S. lawmakers plan to close that gap is still unclear.

Steingraber’s latest comments came after Crypto in America journalist Eleanor Terrett recently shared details from the Clarity Act.Specifically, one section would give certain tokens easier regulatory treatment if they already back a U.S.-listed ETF by January 1, 2026.

Interestingly, this group includes XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink, placing them next to Bitcoin and Ethereum.Under the proposal, these assets would avoid heavy disclosure requirements normally applied to securities.

The bill states that a token must serve as the main asset inside a nationally listed ETF to qualify. Although the language does not officially reclassify these tokens, it moves them toward treatment more similar to commodities. At press time, the bill is still being debated and revised.