Ripple Initiates RLUSD Stablecoin Testing on Ethereum and XRP Network

Ripple, the issuer of XRP, is making strides in the stablecoin arena following CEO Brad Garlinghouse’s mention of the concept at Consensus 2024. The company has initiated the development of a fiat-pegged token named the Ripple USD, or RLUSD, as it sets its sights on the $160 billion stablecoin market primarily dominated by Tether (USDT). Ripple has announced that private beta testing for RLUSD has commenced on XRP’s ledger and the Ethereum mainnet, the second-largest blockchain in the crypto sphere based on market capitalization.

During Consensus 2024, Garlinghouse highlighted the vast potential of the stablecoin market, projecting it to potentially reach a $3 trillion industry by 2030. Ripple’s president, Monica Long, hinted that XRP could introduce its stablecoin token within the same year.

A recent announcement on August 9 outlined that RLUSD will function as a token backed by the U.S. dollar in a 1:1 ratio. The company intends to utilize cash deposits, treasuries, and cash equivalents as reserves. Ripple has committed to providing monthly attestations and engaging a third-party accounting firm for audits, signaling a shift towards regulatory adherence and approval.

Venturing into the stablecoin sector means entering into direct competition with established players like Tether and Circle’s USD Coin (USDC), although Ripple’s CEO emphasized that there is ample space for all participants to thrive.

Circle has demonstrated its ability to comply with stringent stablecoin regulations in Europe, having secured Europe’s first stablecoin license through MICA. Additionally, Circle is on track for a potential initial public offering in the U.S., which could position it as the first stablecoin entity to go public.

In the U.S., policymakers are contemplating regulatory measures concerning stablecoins that could potentially allow banks to engage in this sector. Key legislators such as Patrick McHenry and Maxine Waters are reportedly making headway towards the introduction of such legislation.