The GENIUS Act has recently been signed into law, presenting both challenges and opportunities for Ripple and its cryptocurrency, XRP. While the legislation aims to provide a clearer regulatory path for stablecoin issuers like Ripple, experts assert that its direct influence on XRP’s price will be minimal.
One of the significant advantages of the GENIUS Act is the potential boost for Ripple’s new stablecoin, RLUSD. This legislation is positioned to enable Ripple to compete directly with established players such as USDC and PayPal USD in the U.S. market. According to Austin King, co-founder of Omni Network, the new law gives stablecoins like RLUSD an edge in institutional adoption, which is critical for success in the burgeoning crypto space.
Yuri Brisov, a partner at Digital & Analogue Partners, emphasized that RLUSD will allow Ripple to function as a liquidity provider in the U.S. market, enhancing its role as an integral part of the financial system. However, this increased competition in the stablecoin arena is not expected to significantly affect XRP’s market price.
Despite the burning of a small amount of XRP for every RLUSD transaction to cover network fees, the total impact remains negligible when considering the vast supply of XRP in circulation. David Schwartz, Ripple’s CTO, previously noted that burning XRP won’t substantially diminish the overall supply in the near future.
The ongoing SEC vs. Ripple lawsuit also complicates matters. While XRP is not classified as a security when sold on exchanges, the situation remains murky regarding institutional placements. This legal ambiguity could affect XRP’s role as a bridge token.
Brisov pointed out that with the GENIUS Act, Ripple now has the opportunity to reduce its reliance on XRP amidst existing regulatory uncertainties, leveraging RLUSD instead. Forward-looking legislation like the proposed CLARITY Act, which aims to better define digital assets, could further clarify XRP’s classification, possibly leading to expanded tokenization opportunities for Ripple in the future.
In summary, while the GENIUS Act represents progress for stablecoin regulation and provides Ripple with a competitive advantage in the market, the ramifications for XRP itself appear to be limited in the immediate future.
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