In summary
- Tomorrow Ripple will launch its RLUSD stablecoin pegged to the dollar and will be available on Ethereum and XRP Ledger.
- RLUSD will begin trading on platforms such as MoonPay, Uphold, and Bitso.
- XRP hit a seven-year high, fueled by a 122% surge.
This Tuesday, Ripple will launch its US dollar-pegged stablecoin called Ripple USD (RLUSD), the company announced.
Backed by US dollars, US government bonds and cash equivalents, Ripple said the token will initially be traded on platforms such as MoonPay, Uphold, Bitso, Archax and CoinMENA. RLUSD will be available on Ethereum and XRP Ledger, Ripple added.
The launch follows a recent rise in the value of XRP, the token created by Ripple’s co-founders that is used in the company’s payment services. XRP hit a seven-year high price of $2.82 earlier this month, after rising 122% in the last 30 days to a current price of $2.45, according to data from CoinGecko.
RLUSD debuts amid growing demand for stablecoins, which have found notable use in areas such as remittances and decentralized finance, or DeFi. This year, the total stablecoin market capitalization has risen to more than $200 billion, a sharp increase from $130 billion in January, according to DeFiLlama.
Stablecoins are intended to track the price of a fiat currency, such as the US dollar, but Ripple Chief Technology Officer David Schwartz issued a recent warning. Some pre-market offerings for RLUSD valued the stablecoin as high as $1.24, a price he says should drop again.
The first stablecoin was launched more than a decade ago, but companies outside the crypto ecosystem may only be beginning to explore. Payments giant PayPal launched its PYUSD stablecoin last year, and a group of companies, including Robinhood, announced plans last month to back a Global Dollar (USDG) stablecoin issued by Paxos.
Ripple indicated that its stablecoin will be regulated by the New York Department of Financial Services, which granted the company a limited purpose trust company license. The license, first issued to a Cryptocurrency company in 2015, effectively makes Ripple’s product subject to New York banking laws.
Ripple said it will publish third-party certifications, providing information on the stablecoin’s support, each month through an independent auditing firm, in the interest of transparency.
Until now, stablecoins are subject to a patchwork of regulations in the US that can vary from state to state, although the NYDFS framework has inspired states like California. Lawmakers have, however, debated the merits of regulating stablecoins at the federal level since the legislation was introduced by Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) in 2022.
Last year, the US House of Representatives Financial Services Committee passed the “Clarity for Payment Stablecoins Act of 2023.” But the bill that would provide a framework for regulating stablecoins still needs to pass the House and Senate. That could involve a period of negotiation and more debate, Circle Vice President Yam Ki Chan previously told Decrypt.
While the 118th Congress will end in less than three weeks, leaving lawmakers little time to pass legislation, Democrats and Republicans had expressed optimism that a framework for stablecoins could be passed in 2024. The next session of Congress will begin on January 3 .
Editor’s note: This story was updated after publication with additional details.
Edited by Andrew Hayward
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
Disclaimer: Please note that the information provided on this page is for News purposes only and should not be considered investment or trading advice. ©Crypto.keynoteusa.com strongly recommends that you conduct independent research and/or consult with a qualified professional before making any investment decisions.
