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Analysis: Ripple’s stablecoin approved says CEO Garlinghouse
December 11, 2024
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Ripple’s CEO Brad Garlinghouse said yesterday that the New York Department of Financial Services (NYDFS) has approved its stablecoin US dollar RLUSD, resulting in a 7% boost in the value of the XRP cryptocurrency. Ripple has not yet starting issuing it.

Earlier this year the announcement of plans for the stablecoin raised concerns amongst the XRP community. Wasn’t XRP meant to be an intermediary currency? Wouldn’t a dollar stablecoin replace that functionality?

However, if a Ripple stablecoin were to encourage more activity on the network, then it would be good for XRP’s other purpose – as the native currency of the XRP Ledger.

An approval by the NYDFS has another benefit. The regulator is rather fussy about which blockchains can be used by companies that hold its trust charter. So far it has only approved Ethereum and Solana which are used by Paxos which issues the PayPal USD stablecoin and its own Paxos dollar. Stablecoin issuer Circle is not a trust company and hence not subject to the same restrictions regarding blockchains.

In other words, with the NYDFS authorization, it’s not just Ripple that can issue regulated tokens on the XRP Ledger, but it makes it much easier for others to do so.

Given Ripple’s institutional focus, that matters. While Circle’s USDC is generally considered safe and regulated, a lack of a trust charter is a weakness from an institutional perspective. That’s not just our opinion. It’s also the view of S&P Global Ratings.

Will institutions adopt stablecoins?

The word institution is nowadays used to cover quite a range of organizations. There are TradFi institutions such as banks and asset managers. There are traditional money transfer businesses which have been Ripple’s sweet spot. Plus, there are a ton of new crypto institutions.

While banks are going to struggle with holding stablecoins because of Basel rules (for now), many around the world are engaging at an experimental level. We’ve written many times about the appeal of stablecoins for asset managers. And XRP holders don’t need to be told about the advantages for cross border payments. So institutional interest in every category is likely to grow very significantly.

The question is whether Ripple and RLUSD can ride the wave.

RLUSD and the competition

There’s an immense amount of competition, with new stablecoins being announced weekly. The recent Paxos announcement of the Global Dollar Network is particularly interesting and is attracting institutions by sharing revenues. USDC issuer Circle is actively targeting corridors in Latin America for corporate payments as illustrated in a recent stablecoin report.

There’s also a recognition about the increasing fragmentation of ledgers. One of the reasons why Solana has done so well of late is because it is not relying on layer 2 scaling solutions. The composable nature of blockchains makes being on the same chain an advantage. That matters for ‘crypto institutions’.

Look at how Ondo uses BlackRock’s BUIDL money market fund as a reserve asset. BUIDL was recently usurped in market capitalization by Hashnote’s US Yield Coin (USYC). Why? Because the Usual Protocol (and stablecoin) is using USYC for its reserves.

Being on the XRP Ledger makes it harder and riskier for protocols on other chains to use RLUSD. On the other hand, RLUSD could kick start more activity on the XRP Ledger. But given activity is currently greater elsewhere, a separate chain is a net disadvantage.

However, Ripple has two aces up its sleeve. One is it already has relationships with many money transfer businesses. Integrations for TradFi institutions are usually a hurdle. With Ripple’s acquisition of the custody firm Metaco, several banks are already integrated. However, apart from BBVA, which is exploring stablecoins with Visa, Metaco’s customers are not amongst the many banks that are embracing stablecoins.

On the other hand, the Ripple brand is associated with two things: cross border payments and fights with the SEC. Hopefully, the former will be the one that springs to mind.

The cart before the horse?

While there’s a lot of exciting happenings in the U.S., it’s worth putting the recent run up in prices into context. Today the market capitalization of the XRP token is around $134 billion. That’s an awful lot.

Last year, Ant Group, the owner of the Chinese payments firm Alipay, was valued at $75 billion. It has more than 1.3 billion users, around 80 million merchants and 650 million active monthly users. Plus, it has various investment and lending apps with serious volumes.

Before the November elections, the XRP Ledger had around 13,000 active wallets daily. Many of those are just trading XRP. But if we take a super optimistic view that they are all transacting for payments and there are 13,000 different wallets each day, that would amount to 390,000 active monthly users. It’s more likely a fraction of that.

Of course, Ant is not a perfect candidate for comparison. But it’s just worth asking if the cart isn’t coming before the horse. Ripple hasn’t even issued the stablecoin yet. It needs to demonstrate that it can get institutions to adopt the stablecoin, not just in announcements but at scale in real transactions. It needs to keep them using the stablecoin in the face of a torrent of competition. And if XRP is to benefit, it needs to attract significant other activity onto the XRP Ledger. The valuation appears to assume this is all guaranteed.

 

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Something historic just happened in Colombia.
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Now it’s the center of an international investigation involving U.S. congressmen, physicists, and Dr. Steven Greer.

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Same shape, movement, and equatorial line.
Italy’s top UAP analysts reviewed the footage.
The metadata was untouched, it wasn't CGI, it’s real.

Inside the Buga Sphere scientists discovered:

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With cross-border payments representing a multi-trillion-dollar corridor, that’s where the largest capital will flow and the greatest returns will come from.

At this point, you’re the gatekeeper to the digital economy. Everything else follows or fades away once regulations take effect.

You either see it or you won’t until it’s too late.

~The Black Swan Capitalist

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The future of Crypto x AI is about to go crazy.

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💠 Users set up personalized agents in < 3 minutes
💠 Equipped w/ crypto wallet and on-chain functions
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👉 What this means for the future of Crypto:

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Musk Turns On Starlink to Save Iranians from Regime’s Internet Crackdown

Elon Musk, the world’s richest man and a visionary behind SpaceX, has flipped the switch on Starlink, delivering internet to Iranians amid a brutal regime crackdown.

This move comes on the heels of Israeli strikes targeting Iran’s nuclear facilities, as the Islamic Republic cuts off online access.

The former Department of Government Efficiency chief activated Starlink satellite internet service for Iranians on Saturday following the Islamic Republic's decision to impose nationwide internet restrictions.

As the Jerusalem Post reports, that the Islamic Republic’s Communications Ministry announced the move, stating, "In view of the special conditions of the country, temporary restrictions have been imposed on the country’s internet."

This action followed a series of Israeli attacks on Iranian targets.

Starlink, a SpaceX-developed satellite constellation, provides high-speed internet to regions with limited connectivity, such as remote areas or conflict zones.

Elizabeth MacDonald, a Fox News contributor, highlighted its impact, noting, "Elon Musk turning on Starlink for Iran in 2022 was a game changer. Starlink connects directly to SpaceX satellites, bypassing Iran’s ground infrastructure. That means even during government-imposed shutdowns or censorship, users can still get online, and reportedly more than 100,000 inside Iran are doing that."

During the 2022 "Woman, Life, Freedom" protests, Starlink enabled Iranians to communicate and share footage globally despite network blackouts," she added.

MacDonald also mentioned ongoing tests of "direct-to-cell" capabilities, which could allow smartphone connections without a dish, potentially expanding access and supporting free expression and protest coordination.

Musk confirmed the activation, noting on Saturday, "The beams are on."

This follows the regime’s internet shutdowns, which were triggered by Israeli military actions.

Adding to the tension, Israeli Prime Minister Benjamin Netanyahu addressed the Iranian people on Friday, urging resistance against the regime.

"Israel's fight is not against the Iranian people. Our fight is against the murderous Islamic regime that oppresses and impoverishes you,” he said.

Meanwhile, Reza Pahlavi, the exiled son of Iran’s last monarch, called on military and security forces to abandon the regime, accusing Supreme Leader Ayatollah Ali Khamenei in a Persian-language social media post of forcing Iranians into an unwanted war.

Starlink has been a beacon in other crises. Beyond Iran, Musk has leveraged Starlink to assist people during natural disasters and conflicts.

In the wake of hurricanes and earthquakes, Starlink has provided critical internet access to affected communities, enabling emergency communications and coordination.

Similarly, during the Ukraine-Russia conflict, Musk activated Starlink to support Ukrainian forces and civilians, ensuring they could maintain contact and access vital information under dire circumstances.

The genius entrepreneur, is throwing a lifeline to the oppressed in Iran, and the libs can’t stand it.

Conservative talk show host Mark Levin praised Musk’s action, reposting a message stating that Starlink would "reconnect the Iranian people with the internet and put the final nail in the coffin of the Iranian regime."

"God bless you, Elon. The Starlink beams are on in Iran!" Levin wrote.

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GENIUS Act lets State banks conduct some business nationwide. Regulators object

The Senate passed the GENIUS Act for stablecoins last week, but significant work remains before it becomes law. The House has a different bill, the STABLE Act, with notable differences that must be reconciled. State banking regulators have raised strong objections to a provision in the GENIUS Act that would allow state banks to operate nationwide without authorization from host states or a federal regulator.

The controversial clause permits a state bank with a regulated stablecoin subsidiary to provide money transmitter and custodial services in any other state. While host states can impose consumer protection laws, they cannot require the usual authorization and oversight typically needed for out-of-state banking operations.

The Conference of State Bank Supervisors welcomed some changes in the GENIUS Act but remains adamantly opposed to this particular provision. In a statement, CSBS said:

“Critical changes must be made during House consideration of the legislation to prevent unintended consequences and further mitigate financial stability risks. CSBS remains concerned with the dramatic and unsupported expansion of the authority of uninsured banks to conduct money transmission or custody activities nationwide without the approval or oversight of host state supervisors (Sec. 16(d)).”

The National Conference of State Legislatures expressed similar concerns in early June, stating:

“We urge you to oppose Section 16(d) and support state authority to regulate financial services in a manner that reflects local conditions, priorities and risk tolerances. Preserving the dual banking system and respecting state autonomy is essential to the safety, soundness and diversity of our nation’s financial sector.”

Evolution of nationwide authorization

Section 16 addresses several issues beyond stablecoins, including preventing a recurrence of the SEC’s SAB 121, which forced crypto assets held in custody onto balance sheets. However, the nationwide authorization subsection was added after the legislation cleared the Senate Banking Committee, with two significant modifications since then.

Originally, the provision applied only to special bank charters like Wyoming’s Special Purpose Depository Institutions or Connecticut’s Innovation Banks. Examples include crypto-focused Custodia Bank and crypto exchange Kraken in Wyoming, plus traditional finance player Fnality US in Connecticut. Recently the scope was expanded to cover most state chartered banks with stablecoin subsidiaries, possibly due to concerns about competitive advantages.

Simultaneously, the clause was substantially tightened. The initial version allowed state chartered banks to provide money transmission and custody services nationwide for any type of asset, which would include cryptocurrencies. Now these activities can only be conducted by the stablecoin subsidiary, and while Section 16(d) doesn’t explicitly limit services to stablecoins, the GENIUS Act currently restricts issuers to stablecoin related activities.

However, the House STABLE Act takes a more permissive approach, allowing regulators to decide which non-stablecoin activities are permitted. If the House version prevails in reconciliation, it could result in a significant expansion of allowed nationwide banking activities beyond stablecoins.

Is it that bad?

As originally drafted, the clause seemed overly permissive.

The amended clause makes sense for stablecoin issuers. They want to have a single regulator and be able to provide the stablecoin services throughout the United States. But it also leans into the perception outside of crypto that this is just another form of regulatory arbitrage.

The controversy over Section 16(d) reflects concerns about creating a regulatory gap that allows banks to operate interstate without the oversight typically required from either federal or state authorities. As the two Congressional chambers work toward reconciliation, lawmakers must decide whether stablecoin legislation should include provisions that effectively reduce traditional banking oversight requirements.

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If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
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Dubai regulator VARA classifies RWA issuance as licensed activity
Virtual Asset Regulatory Authority (VARA) leads global regulatory framework - makes RWA issuance licensed activity in Dubai.

Real-world assets (RWAs) issuance is now licensed activity in Dubai.

~ Actual law.
~ Not a legal gray zone.
~ Not a whitepaper fantasy.

RWA issuance and listing on secondary markets is defined under binding crypto regulation.

It’s execution by Dubai.

Irina Heaver explained:

“RWA issuance is no longer theoretical. It’s now a regulatory reality.”

VARA defined:

- RWAs are classified as Asset-Referenced Virtual Assets (ARVAs)

- Secondary market trading is permitted under VARA license

- Issuers need capital, audits, and legal disclosures

- Regulated broker-dealers and exchanges can now onboard and trade them

This closes the gap that killed STOs in 2018.

No more tokenization without venues.
No more assets without liquidity.

UAE is doing what Switzerland, Singapore, and Europe still haven’t:

Creating enforceable frameworks for RWA tokenization that actually work.

Matthew White, CEO of VARA, said it perfectly:

“Tokenization will redefine global finance in 2025.”

He’s not exaggerating.

$500B+ market predicted next year.

And the UAE just gave it legal rails.

~Real estate.
~Private credit.
~Shariah-compliant products.

Everything is in play.

This is how you turn hype into infrastructure.

What Dubai is doing now is 3 years ahead of everyone else.

Founders, investors, ecosystem builders:

You want to build real-world assets onchain.

Don’t waste another year waiting for clarity.

Come to Dubai.

It’s already here.

 

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🙏 Donations Accepted 🙏

If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
2) or visit https://www.paypal.me/thedinarian

🔗 Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! Namasté 🙏 Crypto Michael ⚡  The Dinarian

 

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