Ripple Initiates Testing of RLUSD Stablecoin on XRPLedger and Ethereum

Ripple, the company responsible for XR, has disclosed that it is conducting trials of its recently unveiled RLUSD stablecoin on both Ethereum and the XRP network.

The firm stated in a blog post on August 9 that, “Ripple USD is presently in its beta phase and is undergoing extensive testing by our corporate partners. This phase is crucial to ensure that the stablecoin meets the highest standards of security, efficiency, and reliability before it is widely accessible, following regulatory approval.”

XRP has experienced a 6% decline to $0.57 today, making it the second-largest loser among the top 100 cryptocurrencies by market capitalization. The token has encountered a turbulent week amidst broader crypto market volatility due to Japan’s unwinding carry trade. Nonetheless, XRP has seen a 33% increase over the month.

Ripple USD (RLUSD) is pegged at a 1:1 ratio to the US dollar and is fully backed by US dollar deposits, short-term US government treasuries, and other cash equivalents. These reserve assets will be audited by a third-party accounting firm, with Ripple committing to publishing monthly attestations.

According to Ripple’s Chief Technology Officer David Schwartz, RLUSD will provide jurisdictional variances from the leading stablecoin in the market, USDT, and adhere to the same US regulations as Circle’s USDC. Schwartz noted in The Defiant’s podcast episode on June 3 that the adoption of RLUSD will hinge on each investor’s risk profile, with US-based entities likely preferring US-regulated stablecoins over Tether.

However, Ripple emphasized today that RLUSD will not be available for public trading or purchase until it secures regulatory approval. This cautionary approach coincides with Ripple’s recent legal victory against regulators. Following a New York City judge’s ruling that the company pay $125 million for violating US securities laws, Ripple’s CEO Brad Garlinghouse expressed satisfaction, stating, “This is a triumph for Ripple, the industry, and the rule of law.” The SEC’s pursuit of the XRP community has subsided.

In 2020, the SEC filed a lawsuit against two of Ripple’s key executives, CEO Brad Garlinghouse and co-founder Chris Larsen, alleging that they unlawfully raised $1.3 billion through the aforementioned securities violation. However, in October 2020, the case was dropped by authorities.