A notable crypto commentator suggests that the GENIUS Act could attract more institutional clients to RLUSD while cementing XRP status as a regulated utility token.
This suggestion came from the community voice “SMQKE” on X following the U.S. Senate’s passing of the GENIUS Act. As previously reported, while 68 Senators voted in favor of the bill, 30 others were against it. Yet, the bill received bipartisan support and establishes clear rules for stablecoins in the United States.
Notably, the regulation requires stablecoin issuers to comply with rules that ensure investor protection and prevent money laundering. Specifically, the GENIUS Act mandates transparent reserve holdings and requires issuers to conduct regular audits.
GENIUS Act to Drive RLUSD Institutional Adoption
Interestingly, SMQKE suggested that Ripple USD (RLUSD) satisfies the requirements of the GENIUS Act, particularly the reserve and audit standards. As a result, he argued that the stablecoin could become more appealing to institutions as the GENIUS Act passed Senate review.
It is worth noting that USD deposits, short-term government bonds, and other cash equivalents collateralize RLUSD. These collaterals ensure that RLUSD maintains the 1:1 peg to the dollar.
Notably, a third-party accounting firm also conducts a monthly attestation of the stablecoin’s reserve to ensure transparency.
Impact on XRP
Meanwhile, SMQKE suggested that the institutional adoption of RLUSD would enhance XRP’s utility and demand. He made this argument because RLUSD operates on multiple networks, including the XRP Ledger (XRPL).
For context, every XRPL-based RLUSD transaction incurs a small XRP fee, which is automatically burned, potentially shrinking the token’s supply over time.
According to SMQKE, as RLUSD institutional adoption soars, demand for XRP will follow suit due to its use in covering fees. While XRP is not a stablecoin, its operation within a stablecoin framework by the GENIUS Act could strengthen its case as a utility token.
XRP and RLUSD to Better Compete Against CBDCs
Furthermore, the community figure asserted that the GENIUS Act would better position RLUSD and XRP to compete against central bank digital currencies (CBDCs) for institutional adoption.
This reasoning suggests that the GENIUS Act would provide the regulatory framework to drive institutional adoption of XRP and RLUSD.
In the meantime, the GENIUS Act still faces another hurdle before it becomes law. The stablecoin bill has only passed in the Senate. Its passage in the House is also a requirement before the U.S. President can sign it into law.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
