Ripple Initiates Trials of Its Latest Stablecoin on Ethereum and XRP Ledger
Fintech company Ripple has revealed that it is currently conducting trials of its new stablecoin on its proprietary blockchain as well as on Ethereum. The San Francisco-based firm made the announcement on Friday, stating that the Ripple USD (RLUSD) stablecoin is designed to cater to the global demand for stablecoins and facilitate cross-border payments. However, the testing phase is just the initial stage of the process.
It’s important to note that RLUSD has not yet received the necessary regulatory approvals, and as a result, it is not available for purchase or trading. Ripple cautioned the public to be wary of scammers claiming to have access to or the ability to distribute Ripple USD.
Ripple also disclosed that while RLUSD is currently undergoing testing on its native blockchain, the XRP Ledger, and the Ethereum network, there are intentions to extend the use of the stablecoin to other blockchains and decentralized finance (DeFi) protocols in the future. DeFi refers to the experimental crypto ecosystem that aims to replace traditional financial institutions.
Earlier in April, Ripple had announced its plans to launch a stablecoin that would be fully backed by U.S. dollars, short-term U.S. government treasuries, and other cash equivalents. Stablecoins like RLUSD are digital tokens pegged to stable assets, such as the U.S. dollar, providing users with the ability to hold assets on a blockchain without being affected by price fluctuations common in other cryptocurrencies like Bitcoin.
Stablecoins play a significant role in the cryptocurrency market, enabling traders to swiftly enter and exit trades within the digital asset economy without the need for traditional banks or brokerages. Tether (USDT), for instance, is the most-traded cryptocurrency with a 24-hour volume of $53.3 billion, according to CoinGecko data.
Ripple, a fintech company focused on enhancing the speed and cost-effectiveness of payments, is renowned for creating XRP, the seventh-largest digital currency by market capitalization.
In a recent development, Ripple emerged victorious in a protracted legal battle against the Securities and Exchange Commission (SEC). The SEC had filed a lawsuit in 2020 accusing Ripple of selling unregistered securities in the form of XRP. A judge ruled in favor of the SEC, finding Ripple in violation of securities laws but imposing a significantly reduced fine of $125 million, much lower than the $2 billion penalty initially sought by the SEC.
The article has been edited by Ryan Ozawa.
