XRP News Today: US Stablecoin Legislation Sparks Optimism About a Ripple Launch

The Wednesday Overview

XRP declined by 0.40% on Wednesday. Following a 0.16% loss on Tuesday, XRP closed the session at $0.4973. Significantly, XRP extended its losing streak to three sessions.

Stablecoins: The Lummis-Gillibrand Payment Stablecoins Act

On Wednesday, Senators Cynthia Lummis and Kirsten Gillibrand were in the spotlight. The Senators introduced the Payment Stablecoin Act. The legislation aims to protect consumers and drive innovation while targeting money laundering and illicit financing.

Senator Kirsten Gillibrand announced the introduction of the Payment Stablecoin Act, saying,

“I’m proud to join Senator Cynthia Lummis to introduce the Payment Stablecoin Act. Passing a regulatory framework for stablecoins is critical to protecting consumers, promoting responsible innovation, and cracking down on money laundering and illicit finance.”

Senator Gillibrand also issued a press release, highlighting the main components of the Act that included,

• Protecting consumers by requiring stablecoin issues to maintain one-to-one reserves and prohibiting unbacked, algorithmic stablecoins.
• Preventing illicit or unauthorized use of stablecoins by issuers and users.
• Creating federal and state regulatory regimes for stablecoin issuers that preserve the dual banking system.

Notably, the press release considered American interests and the US dollar, stating,

“Passing payment stablecoin legislation will support the dollar as the medium of digital exchange. […] Codifying standards for compliant US-issued stablecoins will counter foreign ambitions to establish alternative settlement systems and enshrine American values and the dollar as the base currency for the $4.5 trillion digital economy.”

Ripple Chief Legal Officer Stuart Alderoty responded to the news, saying,

“Senators Cynthia Lummis and Kirsten Gillibrand continue to advance crypto policy with their draft stablecoin bill. There is much left to be done, but great to also see others in Congress now engaging positively with crypto regulation. Innovation is not (and should never be) partisan.”

The bill comes at a pivotal time, as the SEC targets an increasing number of crypto firms with lawsuits.

The Payment Stablecoins Act and Ripple

In April, Ripple announced plans to launch its very own stablecoin. Features of the stablecoin include a 1:1 peg with the US dollar and backed 100% by US dollar deposits, short-term government treasuries, and other cash equivalents.

Progress of the Lummis-Gillibrand Payment Stablecoin Act could facilitate the launch of a Ripple Stablecoin.

Senators Lummis and Gillibrand are well-versed in the digital asset space. In 2022, Senators Lummis and Gillibrand introduced the Responsible Financial Innovation Act. The bill also aims to drive innovation while protecting US consumers. However, its passage has been slow as the bill gives the Commodity Futures Trading Commission more authority to oversee the digital asset space.

Significantly, the lack of progress leaves Ripple and other crypto firms exposed to the SEC’s reign of regulation through enforcement.

SEC vs. Ripple: April 22 Opposition Brief Looming

There were no SEC v Ripple case-related updates for investors to consider on Wednesday. However, April 22 is the next significant date in the amended court briefing schedule. Ripple must file its opposition brief to the SEC’s remedy-related opening brief.

Successfully addressing issues related to post-complaint XRP sales to institutional investors could further provoke the SEC. The SEC argued for a $2 billion disgorgement and prohibition from selling XRP to US institutional investors as the penalty for breaching US securities laws.

A favorable outcome for Ripple could further incentivize the SEC to appeal against the Programmatic Sales of XRP ruling. In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test.

The SEC revealed plans to appeal against the ruling in August 2023 by filing a motion for interlocutory appeal. However, the court denied the motion in October 2023, forcing the SEC to wait until the end of the case before filing an appeal. The ongoing threat of an appeal remains an XRP headwind.

XRP Price Action

Daily Chart

XRP remained below the 50-day and 200-day EMAs, affirming the bearish price signals.

An XRP move through the bottom trend line would bring the top trend line into play. A break above the top trend line could give the bulls a run at the $0.5739 resistance level and 200-day EMA. Selling pressure could intensify at the $0.5739 resistance level. The 200-day EMA is confluent with the resistance level.

Investors should monitor news from the Middle East, SEC chatter, and SEC vs. crypto-related updates.

Conversely, a fall through the $0.48 handle would bring the $0.45 level into play.

The 14-day RSI reading, 32.81, suggests an XRP fall through the $0.48 handle before entering oversold territory.

4-Hourly Chart

On the 4-hourly, XRP hovered below the 50-day and 200-day EMAs. The EMAs confirmed the bearish price trends.

An XRP breakout from the bottom trend line would bring the 50-day EMA into play. A break above the 50-day EMA would support a move to the top trend line and $0.5361 support level. Selling pressure could intensify at the $0.5361 support level. The top trend line is confluent with the support level.

However, an XRP drop below the $0.48 handle could give the bears a run at the $0.45 handle.

The 4-hourly RSI, with a reading of 44.10, indicates an XRP drop below the $0.48 handle before entering oversold territory.