Enterprise-focused blockchain Ripple will begin rolling out its long-awaited US Dollar stablecoin on Tuesday, December 17, after receiving approval from the New York Department of Financial Services (NYDFS) last week.
The stablecoin will be available to users on the XRP ledger and the Ethereum network.
Ripple Announces Launch Of RLUSD Stablecoin
The RLUSD stablecoin is Ripple’s attempt to become the go-to network for international payments. It will be available on select crypto exchanges and platforms, including MoonPay, Uphold, Archax, and CoinMENA. Additional listings are planned on Bitso, Bullish, Bitstamp, Mercado Bitcoin, and others. Speaking about the launch, Ripple’s senior vice president of stablecoins, Jack McDonald, said in a recent interview,
“Utility is at the forefront, and doing that in a regulated and compliant way is what we’re all about.”
According to McDonald, the RLUSD will appeal to those interested in digital assets but averse to the volatility associated with most cryptocurrencies.
“Stablecoins are a bit of a hybrid situation, where it walks and talks a lot like a U.S. dollar, but by its nature, is nowhere near as volatile as cryptocurrencies are.”
The launch comes after Ripple CEO Brad Garlinghouse announced that the RLUSD had secured final approval from the New York Department of Financial Services, clearing the way for rolling out the stablecoin for the general public after concluding its testing phase. The RLUSD is fully backed by US Dollar deposits, US government bonds, and cash equivalents, which will help keep its price at $1.
The Growing Stablecoin Ecosystem
Stablecoins have cemented themselves as one of the most popular types of cryptocurrency and have achieved a market cap of over $200 billion, according to data from CoinGecko. They are popular in countries grappling with high inflation. The stablecoin market is dominated by two major players: Tether’s USDT and Circle’s USDC. Ripple hopes RLUSD will help it compete with both, given stablecoins are quickly becoming a key piece of infrastructure, helping bridge traditional finance and digital markets, acting as liquidity for trading, a medium for blockchain-based transactions, and cross-border payments.
Several traditional finance companies, including PayPal, Visa, and Societe Generale, have also entered the stablecoin space as regulators around the world draft guidelines for the asset class. Ripple CEO Brad Garlinghouse said in a statement,
“Early on, Ripple made a deliberate choice to launch our stablecoin under the NYDFS limited purpose trust company charter, widely regarded as the premier regulatory standard worldwide. As the U.S. moves toward clearer regulations, we expect to see greater adoption of stablecoins like RLUSD, which offer real utility and are backed by years of trust and expertise in the industry.”
The RLUSD stablecoin will initially be available in the Americas, Asia-Pacific, UK, and the Middle East.
Volatility Warning
As a stablecoin, the RLUSD aims to maintain a 1:1 peg with the dollar. David Schwartz, Ripple’s Chief Technology Officer said it may see unusual volatility due to early demand and limited initial supply. He also added some traders were willing to pay as much as $1200 to purchase a fraction of the stablecoin.
“There may be supply shortages in the very early days before the market stabilizes. Please don’t FOMO into a stablecoin. This is not an opportunity to get rich.”
Additions To Advisory Board
Ripple also announced two new additions to its advisory board: Raghuram Rajan, former governor of the Reserve Bank of India, and Kenneth Montgomery, the former first vice president and COO of the Federal Reserve Bank of Boston. Rajan and Montgomery join board members, including Sheila Bair, former chair of the FDIC, and Chris Larsen, co-founder and executive chairman of Ripple.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
