by Jake ClaverReporting from ETH Denver, the biggest update isn’t a price call, it’s a timeline. Patrick Witt, the White House’s point person on crypto policy, has said he’s hopeful the Clarity Act passes by the Friday before Easter. That’s a real deadline worth tracking, even if legislative timelines slip.
Why the Clarity Act may get split
The current draft faces resistance from Democrats, mainly over the DeFi provisions tied to permissionless lending. That opposition isn’t unreasonable. Managing a large XRP position for clients at Digital Wealth Partners means thinking hard about what happens when lending protocols don’t have any human backstop.
A realistic model for lending on the XRPL involves four parties: a borrower, a lender, a broker who underwrites the risk, and an arbiter who steps in if a dispute or default happens. For simple overcollateralized loans, two parties in a pool cover it. For anything closer to a traditional loan, banks and institutions will want a broker in the middle and a way to resolve disputes. When markets get volatile, clients with those triparty agreements in place got time to meet capital calls; pure DeFi users with no such structure got liquidated instantly. People want the efficiency of DeFi with the protections of traditional finance, and that gap is exactly what regulators are trying to close. My expectation is that the DeFi-specific language gets stripped out of the Clarity Act and handled in separate legislation later.
The macro backdrop and why banks won’t just use RLUSD
Separately, a US naval presence has been building in the Gulf of Oman while Iran runs drills near the Strait of Hormuz. If Iran were to disrupt shipping there even temporarily, it would likely push oil and the yen higher, and some analysts think that kind of shock could accelerate institutional demand for real-time settlement rails. That’s a scenario to watch, not something to bank on.
On the stablecoin question: why would a bank route payments through XRP if Ripple’s RLUSD can already settle instantly? Counterparty risk. If Bank of America, JPMorgan, and Citi each issue their own stablecoin, none of them wants to hold a competitor’s token or fund another bank’s treasury yield. They need a neutral bridge asset that lets all of these stablecoins swap against each other, otherwise you’ve just rebuilt the old Nostro/Vostro correspondent-banking problem on-chain. That’s the role XRP is positioned to play.
Custody and structuring
On the custody side, our clients hold assets at Anchorage, an OCC-regulated, federally chartered bank that uses hardware security modules rather than multi-party computation. Keys are sharded across HSMs globally and never fully reassembled, withdrawals require whitelisting a destination address and can take up to 24 hours, and accounts carry insurance up to $100 million through Lloyd’s of London. That friction is by design.
Income and growth fund structures at Digital Wealth Partners let clients choose between quarterly cash distributions (taxable) or compounding their position (only taxed when redeemed). If you hold assets in institutional multi-sig custody rather than exercising direct dominion and control, staking rewards, if the XRPL enables staking, would likely not be taxable until you actually withdraw them, according to guidance our CPAs have reviewed. Always confirm current tax treatment with your own advisor before relying on this, since digital asset tax rules continue to evolve.
Where this leaves midterm risk
If Democrats gain ground in the House or Senate this fall, broader crypto legislation likely stalls. That wouldn’t change XRP’s existing regulatory clarity in the US, but it would slow down projects still waiting on the Clarity Act, including ones I think are building real things, like Hyperliquid and Hidden Road. Whatever your view on the bill’s odds, the underlying thesis doesn’t depend on any single vote: XRPL infrastructure keeps shipping regardless of the legislative calendar.
Educational only, not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
