XRP Strengthens as GENIUS Act Boosts RLUSD Adoption

XRP is positioned to gain significant traction following the Senate’s approval of the GENIUS Act, which outlines new regulations for stablecoins and could boost institutional confidence in Ripple-affiliated assets like RLUSD.

According to well-known crypto analyst SMQKE, the recent passage of the GENIUS Act in the U.S. Senate could solidify XRP’s classification as a regulated utility token while simultaneously paving the way for greater institutional adoption of Ripple USD (RLUSD). This landmark legislation delivers much-needed regulatory clarity for stablecoin issuers and has potential implications across the broader digital asset landscape.

The GENIUS Act — passed by a congressional vote with 68 Senators in favor and 30 against — garnered bipartisan support. By establishing transparent compliance measures, including detailed reserve disclosures and mandatory third-party audits, the bill introduces standardized protocols that stablecoin providers must meet to ensure investor protection and mitigate risks of financial crime.

RLUSD Positioned for Institutional Embrace

SMQKE highlighted that RLUSD already aligns well with the GENIUS Act’s stringent requirements. The stablecoin is backed 1:1 with reserves that include U.S. dollar deposits and short-term government securities, ensuring reliable value stability. Ripple has further enhanced transparency by engaging an independent accounting firm to deliver monthly attestations confirming the adequacy and liquidity of these reserves.

This proactive compliance model not only demonstrates RLUSD’s preparedness under the new regulatory framework but also increases its attractiveness to traditional financial institutions. By meeting key benchmarks related to reserve integrity and auditability, RLUSD is now poised to become a preferred option among institutional investors looking for credible, regulated stablecoins.

The Ripple Effect on XRP

While RLUSD stands to directly benefit from regulatory acceptance, XRP may experience parallel growth due to its accompanying utility in RLUSD transactions. As SMQKE pointed out, RLUSD is integrated with multiple blockchain networks, including the XRP Ledger (XRPL). Transactions involving RLUSD on XRPL incur a nominal fee in XRP, which is automatically burned, contributing to a reduction in the circulating supply of XRP over time.

This deflationary mechanism gains added relevance as RLUSD sees heightened usage. The increased transactional volume, driven by institutional engagement, would naturally elevate XRP demand as the underlying fuel for XRPL-based operations. Consequently, XRP’s role within this stablecoin ecosystem frames it as a strategic enabler — reinforcing its status as a utility token rather than a speculative asset.

Competing with Central Bank Digital Currencies

Another important implication identified by analysts like SMQKE is XRP and RLUSD’s enhanced ability to hold their ground against emerging central bank digital currencies (CBDCs). With the GENIUS Act creating a regulatory sandbox for stablecoins, private issuers gain a competitive advantage in terms of agility and adoption compared to slow-moving governmental projects.

This new framework gives RLUSD and XRP the legitimacy needed to compete on a level playing field with CBDCs in institutional finance. XRPL’s efficiency, low cost, and transaction speed further differentiate it from some of the still-theoretical or siloed implementations government-backed digital currencies may pursue.

Legislative Path Forward

Despite its Senate approval, the GENIUS Act is not yet law. The bill must pass through the House of Representatives before reaching the President’s desk for final ratification. Still, the strong bipartisan momentum it has garnered in the Senate enhances optimism for successful passage through the remaining legislative steps.

In the event of full enactment, the GENIUS Act could be a turning point for crypto regulation in the U.S. — offering Ripple and its associated digital assets like XRP and RLUSD a robust legal foundation to accelerate mainstream adoption.

Related: Expert Advice: Sell XRP If You’re Confused

With clear compliance standards, institutional trust, and real-world utility converging, XRP’s trajectory as a core infrastructure token in a regulated digital economy appears more viable than ever before.