Pundit Explains How XRP Will Benefit from Upcoming US Stablecoin Regulation

$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.