Ripple Initiates Trials of RLUSD Stablecoin on XRP Ledger and Ethereum
Ripple, a prominent player in cross-border payments, has initiated beta testing for its latest stablecoin, Ripple USD (RLUSD), on both the XRP Ledger (XRPL) and Ethereum mainnet. This move signifies a significant advancement in Ripple’s endeavors to broaden its footprint in the cryptocurrency sphere and enhance its cross-border payment solutions.
RLUSD is crafted as a stablecoin pegged 1:1 to the US dollar. Ripple has outlined that the stablecoin will be fully supported by US dollar deposits, short-term US government treasuries, and various other cash equivalents.
To uphold transparency and credibility, Ripple has pledged to release monthly attestations and subject the reserve assets to audits conducted by an independent third-party accounting firm.
At present, RLUSD is undergoing a private beta phase and undergoing testing with Ripple’s corporate partners. It is crucial to note that the stablecoin is not yet accessible for purchase or trading, pending regulatory approval. Ripple has issued caution against potential scams that may falsely promise early access to RLUSD.
The introduction of RLUSD aligns with Ripple’s overarching strategy to enrich opportunities, liquidity, and institutional use cases for a diverse range of users, developers, and applications on the XRP Ledger. Ripple President Monica Long has emphasized that the stablecoin complements XRP, the cryptocurrency that underlies the XRP Ledger.
Upon widespread availability, Ripple intends to integrate RLUSD into its cross-border payments solution alongside XRP. The company envisions that RLUSD will elevate the global payment experience for its clientele, tapping into a market anticipated to exceed $2.8 trillion by 2028.
Ripple’s foray into the stablecoin arena comes at a juncture when the total stablecoin supply has surged to $172.29 billion, with USDT and USDC commanding 70.6% and 21% market share, respectively. By introducing RLUSD, Ripple aims to vie with these established stablecoins and establish itself as a key player in this burgeoning market.
The beta testing of RLUSD follows a recent legal development for Ripple. On August 7, Judge Analisa Torres imposed a $125 million penalty on Ripple Labs in a Securities and Exchange Commission (SEC) lawsuit filed in 2020. Despite the penalty, Ripple CEO Brad Garlinghouse hailed the ruling as a “victory” against the SEC, which had initially sought a $2 billion fine.
The lawsuit, alleging that Ripple had conducted unregistered securities offerings through XRP sales, concluded with the judge affirming that Ripple’s institutional sales of XRP breached securities laws, while sales to retail investors did not. Consequently, XRP is not classified as a security under US law, offering some regulatory clarity for Ripple and the XRP ecosystem.
Following the court ruling, XRP witnessed a positive response, surging by 26% and hitting a peak of $0.64. However, despite these favorable developments, the XRP Ledger encountered a 65.6% decline in transaction volume in the second quarter of 2024, as per Ripple’s Q2 2024 XRP Markets Report.
