RippleUSD Stablecoin Receives Approval from New York Department of Financial Services
RippleUSD – Ripple’s Chief Technology Officer, David Schwartz, has issued a warning regarding potential volatility and supply shortages for Ripple’s upcoming US dollar-pegged stablecoin, RippleUSD (RLUSD). Despite the stablecoin’s intention to maintain a 1:1 parity with the US dollar, Schwartz cautioned that the initial stages of trading could experience price fluctuations driven by large, early bids.
Schwartz pointed to instances of speculative bidding, where 1 RLUSD was priced at an inflated value, around 511 XRP, or roughly $1,244. He stressed that such inflated prices were not reflective of the true value of the stablecoin. According to Schwartz, this was the result of market speculation and fear of missing out (FOMO), as some buyers sought to acquire the first available RLUSD on the market.
Price Stabilization Expected
Schwartz reassured investors, stating that the price of RLUSD would eventually stabilize near $1 once supply was able to meet demand. He further warned that if the price did not stabilize, it would signal significant issues with the stablecoin’s underlying infrastructure.
RippleUSD’s Launch and Future Plans
Ripple received final approval for RLUSD from the New York Department of Financial Services on December 11, with the stablecoin expected to launch “soon.” Ripple aims to use RLUSD in tandem with XRP as part of its cross-border payment solutions, targeting institutional customers.
The stablecoin will be backed by a combination of USD deposits, short-term Treasury bonds, and cash equivalents, with a target market capitalization of $2 trillion by 2028. Ripple also plans to provide monthly attestations about its reserves, conducted by the San Francisco-based accounting firm BPM.
Ripple’s Commitment to XRP and RLUSD
Despite the focus on RLUSD, Ripple CEO assured investors that the company remains committed to XRP. Ripple continues to focus on both XRP and RLUSD, dismissing rumors that it might shift focus away from the XRP token amidst its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).
Ripple’s distribution partners for RLUSD include exchanges such as Bitstamp, Bitso, and Uphold, alongside crypto firms like Keyrock and B2C2, which will serve as market makers for the stablecoin.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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