XRP community researcher SMQKE has outlined how upcoming U.S. stablecoin regulations could boost XRP’s adoption, utility, and market value.
The analysis highlights how Ripple’s USD stablecoin, RLUSD, will directly benefit from the new regulatory framework. It projects that RLUSD could drive increased usage on the XRP Ledger and raise demand for XRP in the process.
Regulatory Clarity Opens Doors for RLUSD
The GENIUS Act, which mandates reserve requirements, audits, and licensing for stablecoins, will bring much-needed regulatory clarity to the market. Experts argue that this will increase RLUSD’s credibility and ensure its regulatory compliance.
As a result, RLUSD could become more attractive to institutional investors looking for a stable, regulated digital asset for transactions. Proponents believe this outcome will likely drive greater adoption and activity on the XRP Ledger.
XRP’s Key Role in RLUSD Transactions
Regarding how RLUSD’s increased usage benefits XRP, proponents point out that every time RLUSD is transacted, a small XRP-denominated fee is charged. Notably, that fee is burned, reducing the total supply of XRP in circulation.
The theory is that as RLUSD grows in popularity, especially for cross-border payments and remittances, the demand for XRP as a bridge asset will rise. In turn, this phenomenon will lead to an upward push in the value of XRP.
Strengthening XRP’s Legal Standing
Furthermore, SMQKE noted that the regulatory clarity provided by the GENIUS Act will also help solidify XRP’s legal status.
While XRP is not a stablecoin, its operation within a regulated framework will strengthen its position as a utility token rather than a security. This will provide greater legal certainty for investors, businesses, and financial institutions.
Competing with CBDCs
Another major advantage SMQKE highlighted is the positioning of RLUSD against Central Bank Digital Currencies (CBDCs).
Notably, the U.S. government has banned the creation of a federal CBDC. Meanwhile, President Trump’s executive order emphasized the importance of USD stablecoins, like RLUSD, in promoting the dollar’s dominance globally.
Ultimately, SMQKE’s commentary suggests that the regulatory changes brought about by the GENIUS Act could usher in a new era for XRP, even though XRP itself is not a stablecoin.
It is worth mentioning that under the proposed GENIUS Act, only stablecoins with over $10 billion in market value are subject to federal regulation. Currently, Ripple’s RLUSD stablecoin is well under the $10 billion cap. As a result, it can opt for state-level regulation if it meets federal standards.
