#BinanceNews

Treasury Bonds and $XRP $ETH $XLM

The concept of United States Treasury bonds linked to XRP arises from a strategy implemented by Ripple to back its new stablecoin RLUSD (Ripple Liquidity USD). Here’s how it works:

Backing of Stablecoins like RLUSD

Stablecoins are designed to maintain a stable value, generally pegged to a fiat currency like the US dollar. To ensure this stability, they must be backed by high-quality assets, such as:

1. Cash deposits.

2. Cash equivalents (such as certificates of deposit).

3. United States Treasury bonds.

Treasury bonds are financial instruments issued by the U.S. government, considered very safe because they have the full backing of the federal government. Ripple uses these bonds as part of the reserves that guarantee the value of its stablecoin.

RLUSD and the Role of XRP

Although RLUSD is directly backed by dollars and bonds, it integrates with the Ripple ecosystem, where XRP acts as a bridge token. This means:

Fast transactions: XRP facilitates the conversion between RLUSD and other currencies or cryptocurrencies efficiently.

Global liquidity: The reserves (including Treasury bonds) ensure that RLUSD can be redeemed at any time, fostering trust among users and markets.

Advantages of including Treasury bonds

1. Stability: Treasury bonds are low-risk assets, which adds confidence to the RLUSD stablecoin.

2. Yield: These bonds generate interest, which can help finance the Ripple ecosystem or reduce operational costs.

3. Regulation: Having traditional and secure assets can help Ripple comply with regulations.

Responsibility, Investments in cryptocurrencies carry risks, what is stated here does not mean that it has to increase in price, it is said that forecasts are that XRP may significantly increase its value in 2025 because investors will make XRP scarce by holding it as a valuable asset with interest.