A pivotal announcement from the U.S. Securities and Exchange Commission (SEC) has sparked renewed optimism in the XRP community. The SEC’s Division of Corporation Finance has issued a detailed statement recognizing certain fiat-backed stablecoins—labeled “Covered Stablecoins”—as cash equivalents rather than securities.
The move marks a major regulatory shift that could unlock institutional capital and reshape the digital asset landscape.
According to XRP Governor, a prominent voice in the community, “The U.S. SEC just dropped a BOMB on the markets… Compliant stablecoins are now being recognized as cash equivalents — a historic shift that could unleash billions in institutional capital. This is massive for adoption, and XRP and RLUSD are perfectly positioned to lead the charge.”
🚨 BREAKING:
The U.S. SEC just dropped a BOMB on the markets.Compliant stablecoins are now being recognized as cash equivalents — a historic shift that could unleash billions in institutional capital. 🏦🚀
This is massive for adoption and #XRP + RLUSD are perfectly positioned… pic.twitter.com/nd3npXFhiS
— XRP Governor (@xrpgovernor) August 5, 2025
SEC Acknowledges Covered Stablecoins as Cash Equivalents
The SEC’s statement outlines specific conditions that must be met for a stablecoin to qualify as a “Covered Stablecoin.” These include being pegged one-to-one to a reference asset such as the U.S. dollar, backed by highly liquid, low-risk reserves, and redeemable at par on demand. Crucially, the SEC affirms that issuance and redemption of such stablecoins do not constitute the offer or sale of securities under U.S. law.
This recognition elevates compliant stablecoins into the same financial category as cash equivalents, aligning them with traditional financial instruments rather than speculative crypto assets. The agency further clarified that minting and redeeming Covered Stablecoins, under these strict criteria, do not require SEC registration or qualify as regulated securities activity.
For the crypto market, this distinction brings long-needed clarity—and with it, the potential for large-scale institutional participation.
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RLUSD: A Model for Regulatory Alignment
Ripple’s stablecoin, RLUSD, launched in December 2024, appears tailor-made for this new regulatory environment. RLUSD is fully backed, dollar-pegged, and redeemable at a 1:1 ratio. Designed from inception with compliance and transparency in mind, it aligns squarely with the SEC’s criteria for Covered Stablecoins.
Moreover, RLUSD is available across the XRP Ledger and Ethereum, offering flexibility for financial institutions, payment providers, and on-chain liquidity providers. Now, with the SEC’s endorsement of this stablecoin structure, RLUSD is better positioned to serve as a trusted bridge between traditional finance and blockchain-based systems.
A Path Forward for Utility and Adoption
The XRP community views this development not just as a win for Ripple, but as a gateway to broader utility. By confirming that compliant stablecoins function legally as cash equivalents, the SEC has created the foundation for real-world use cases—from remittances and enterprise payments to tokenized finance and treasury management.
“Regulatory clarity has arrived,” XRP Governor wrote. “Now comes utility, dominance, and liftoff.”
For XRP, RLUSD, and the broader ecosystem Ripple has built, this isn’t just a regulatory update—it’s the green light for institutional-scale innovation.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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