According to CNBC, Ripple’s new U.S. dollar-backed stablecoin, Ripple USD (RLUSD), is set to launch, with trading slated to begin on Tuesday following approval from the New York State Department of Financial Services. This stablecoin will be issued on both the Ethereum blockchain and the XRP Ledger, initially available on select global exchanges, excluding platforms like Coinbase (COIN) and Robinhood (HOOD). The expansion to additional exchanges is planned for the coming weeks.
The initiative to launch RLUSD stems from Ripple’s observation of a significant increase in cross-border payments. Jack McDonald, Ripple’s Senior Vice President of Stablecoins, highlighted to CNBC that the company’s growing use of stablecoins in its payment flows underscored the need for a native stablecoin that could offer both cost efficiency and operational effectiveness.
This launch occurs at a time when the cryptocurrency sector is hopeful for more favorable U.S. regulations under the incoming administration of President-elect Donald Trump. The backdrop includes Ripple’s past legal tussle with the SEC, where a partial victory was achieved, delineating that while XRP is considered a security when sold to institutions, it isn’t when traded by retail investors on exchanges.
The stablecoin market has seen a notable expansion this year, with its market cap growing by 50% and an additional 15% post-election. Currently, the market is heavily dominated by Tether (USDT) and Circle’s USDC, controlling approximately 70% and 20% of the market, respectively. McDonald pointed out a market demand for alternatives to these established players, driven by concerns over market concentration, which is also a focal point for regulators and new entrants into the market.
Ripple, with its foundation in business-to-business payments and a significant portion of its operations outside the U.S., sees RLUSD as a complement to its existing services rather than a replacement for XRP. The stablecoin’s introduction on both Ethereum and XRP Ledger platforms is expected to enhance the utility of XRP as a bridge asset within the XRP Ledger ecosystem.
The announcement of RLUSD adds to the already crowded stablecoin sector, joining recent initiatives like USDG by Robinhood, Kraken, Galaxy Digital, and others, alongside efforts by companies like MercadoLibre and Revolut. This move by Ripple not only aims to tap into the growing stablecoin market but also to strengthen its position in facilitating cross-border payments, leveraging both XRP and stablecoins for different aspects of its operations.
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