The passage of the GENIUS Act in the U.S. marks a new stage in the regulation of stablecoins, particularly for Ripple and its stablecoin RLUSD. The law establishes clear rules that may facilitate the application of digital currencies in the financial market.
The GENIUS Act: Pros and Cons
The GENIUS Act, which stands for "Guiding and Establishing National Innovation for U.S. Stablecoins," is the first serious step in the regulatory framework for stablecoins in the country. Passed in the Senate with a 68-30 vote, the law introduces strict standards for stablecoins, including:
* Full backing with reserves like cash or short-term Treasuries. * Mandatory third-party audits to ensure transparency. * Licensing requirements for companies issuing these tokens.
Senator Bill Hagerty stated that the goal of the law is simple: to modernize payments and provide Americans with faster and more convenient digital money options.
RLUSD: Regulation-Ready
Ripple's stablecoin RLUSD, pegged to the U.S. dollar and launched on the XRP Ledger, was designed with future regulatory norms in mind. According to crypto analyst SMQKE, RLUSD is developed to meet all the criteria set by the GENIUS Act: transparency, backing, and compliance. This positions RLUSD as one of the most institution-friendly stablecoins on the market, which is of interest to banks, fintechs, and governments exploring crypto payments.
XRP's Prospects and Market Impact
Each RLUSD transaction occurs on the XRP Ledger, and with each transaction, a small amount of XRP is burned. This is not just a technical point, but an economically significant factor. With less XRP in circulation and increased demand for settling RLUSD transactions, this could lead to a price increase for XRP. Furthermore, while the GENIUS Act targets stablecoins, any potential regulatory clarity may also extend to XRP, which Ripple claims is a utility token for real-time settlement. These laws could set a precedent for broader digital asset classification, significantly impacting XRP and its role in the ecosystem.
The passage of the GENIUS Act is a landmark event for both stablecoins in the U.S. and for Ripple and XRP. With a clear legal framework now in place, RLUSD may find itself in a key position in the financial market, while XRP may finally achieve the anticipated regulatory clarity.
