Ripple Initiates Testing of RLUSD Stablecoin on XRP Ledger and Ethereum

Ripple has commenced beta testing of its USD-backed stablecoin, Ripple USD (RLUSD), on the XRP Ledger (XRPL) and Ethereum mainnet. The objective, as stated in the announcement, is to introduce “high-quality assets to the XRPL,” thereby improving liquidity and institutional applications.

Currently, RLUSD is not available for purchase or trading as it is undergoing testing by Ripple’s corporate partners. Users are cautioned to remain vigilant against potential scams that may exploit the Ripple brand during this testing phase.

The testing phase is deemed critical to guarantee that the stablecoin meets the highest standards of security, efficiency, and reliability before it is widely accessible and after receiving regulatory approval.

Additionally, Ripple aims to incorporate RLUSD and XRP into its cross-border payment solution once the stablecoin is launched, and also intends to broaden the utilization of RLUSD to DeFi protocols.

RLUSD is pegged at a 1:1 ratio with the US dollar, supported by US dollar deposits, short-term US government treasuries, and cash equivalents. Ripple commits to monthly attestations and third-party audits of the reserve assets.

During the testing phase, the company has provided contact addresses for the XRPL Explorer and Ethereum token contracts to enhance transparency.

In a related development, on August 7, District Judge Analisa Torres from the District Court of the Southern District of New York partially dismissed the SEC’s motion for remedies in their lawsuit against Ripple filed in 2020.

In July 2023, the judge ruled that Ripple’s institutional sales of XRP were considered investment contracts and violated securities laws, while their programmatic sales to retail were not seen as the distribution of unregistered securities.

Consequently, the SEC motion sought over $2 billion from Ripple as compensation for allegedly selling XRP as an unregistered security. Judge Torres upheld her decision and ordered Ripple to pay a $125 million fine for 1,278 transactions that breached Section 5 of the Securities Act of 1933.

As a result, the lawsuit concluded, and XRP was not classified as a security under US law.