The launch of RLUSD, Ripple Labs’ stablecoin, could be the big price catalyst that XRP needs to reach all-time highs.
However, Mandela Amoussou, Cryptocurrency market analyst, puts a cold shoulder to the enthusiasm generated by the launch of the financial product and in his latest report poses a hypothetical scenario where the stablecoin could harm XRP.
In his analysis, the author highlights the performance that the cryptocurrency had afterBitcoin/” target=”_blank” rel=”noreferrer noopener”> the triumph of Donald Trump in the United States presidential elections. At the beginning of November, The price of XRP skyrocketed and registered a maximum of $2.70, a level not seen more than 6 years ago.
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XRP price throughout its history. Fountain: TradingView.
Ripple was one of the main protagonists after the electoral victory of the Republican leader, who adopted a position in favor of cryptocurrencies during his campaign. Furthermore, with the output of Gary Gensler as head of the Securities and Exchange Commission of that country (SEC), the company currently run by Brad Garlinghouse could close its legal dispute with the regulatory body.
New York State authorized RLUSD. Source: image generated by Grok’s artificial intelligence, by CriptoNoticias.
For Amoussou, the launch of RLUSD in this context, that is, in the midst of a bullish sentiment that is perceived among traders, “is an excellent example of how to take advantage of market conditions.” Furthermore, he says, “Well-timed product launches and strategic partnerships can amplify the momentum of related assets, easily generating double-digit gains for these assets.”
As CriptoNoticias already reported, RLUSD maintains a 1:1 peg to the dollar through backing of dollar deposits, short-term U.S. Treasury bonds, and other cash equivalent instruments. Likewise, this stablecoin operates both in Ethereum/” target=”_blank” rel=”noreferrer noopener”>Ethereum as in XRP Ledger, whose native currency for paying commissions is XRP.
“I consider it a smart business move to launch RLUSD on Ethereum and strategic move. “This launch on both networks opens up more usage opportunities for RLUSD.”
Likewise, he highlights that, in his opinion, the use will be seen more naturally in XRP Ledger due to the volume of institutional payments that Ripple processes and the focus: fast and cheap cross-border payments.
The specialist further highlights that RLUSD was issued in accordance with the New York State Department of Financial Services (NYDFS) stablecoin guidelines and will be subject to rigorous periodic reporting, including audits of fiat reserves by third parties.
This is relevant information, especially considering that banking institutions are looking for answers in the technology provided by cryptocurrency networks to improve efficiency in international payment transactions and reduce transaction time delays. However, They must comply with strict financial regulations and that is where RLUSD can be the best solution.
Now, after mentioning these advantages offered by Ripple’s new financial product, it is time to investigate Amoussou’s proposal: “RLUSD: A threat or a catalyst for XRP?”
Possible scenarios
“For now, RLUSD does not represent a direct threat to the use of XRP in the Ripple ecosystem, although there are hypothetical scenarios in which its adoption could affect the role of XRP,” says the analyst.
This is because institutional adoption of RLUSD will increase trading volume on the XRP Ledger and consequently there will be greater demand for XRP for commission payments. This will result in upward pressure on the price of the cryptocurrency that Ripple Labs issues.
However, Amoussou clarifies that “there are future scenarios in which the adoption of RLUSD could become a threat to the role of XRP in the Ripple ecosystem.”
Specifically, the specialist warns that, if RLUSD acquires a great role among financial institutions, there is a possibility that Ripple will partially replace the need to use XRP as a liquidity bridge.
It is important to note that XRP is used as a bridge currency in the Ripple ecosystem to facilitate cross-border settlements in real time, converting sender’s currency to XRP and then to recipient’s currency.
“This is a hypothetical scenario, but it should not be ruled out, as the ecosystem is evolving rapidly and regulation and adoption are occurring at a faster and more unpredictable pace,” he notes.
In closing, the author of the report considers that the launch positions Ripple Labs as a major competitor in the stablecoin sector, a market whose market capitalization exceeds $200 billion. According to data from DeFiLlama68% of dominance corresponds to Tether (USDT), while 20% is accounted for by Circle (Blockchain/” target=”_blank” rel=”noreferrer noopener”>USDC). Amoussou furthermore thinks:
“What is distinctive about RLUSD is Ripple’s institutional transaction volume, its payments network, and the institutional partnerships that Ripple has built over the years, which will benefit RLUSD in terms of adoption.”
Mandela Amoussou, cryptocurrency market analyst.
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