Ripple Launches Testing Phase for RLUSD Stablecoin on Ethereum and XRP
Ripple, the issuer of XRP, is making progress with its plans to launch a stablecoin, following CEO Brad Garlinghouse’s mention of the idea at Consensus 2024. The company is developing a fiat-pegged token called the Ripple USD, or RLUSD, as it aims to tap into the $160 billion stablecoin market currently dominated by Tether (USDT). Private beta testing for RLUSD has already started on XRP’s ledger and the Ethereum mainnet, the second-largest blockchain in the crypto market.
During his speech at Consensus 2024, Garlinghouse highlighted the potential of the stablecoin market, suggesting that it could grow into a $3 trillion industry by 2030. Ripple’s president, Monica Long, also hinted that the company is likely to launch its stablecoin token sometime this year.
According to an announcement made on August 9, RLUSD will function as a token backed by the U.S. dollar at a 1:1 ratio. Ripple plans to utilize cash deposits, treasuries, and cash equivalents as reserves for the stablecoin. The company has also committed to providing monthly attestations and undergoing audits by a third-party accounting firm. This move indicates Ripple’s intention to adhere to regulatory requirements and gain approval.
By entering the stablecoin market, Ripple will directly compete with established players like Tether and Circle’s USD Coin (USDC), despite Garlinghouse’s belief that there is enough room for all participants to thrive. Circle, in particular, has demonstrated its ability to comply with comprehensive stablecoin regulations in Europe and is preparing for an initial public offering in the United States, which could make it the first stablecoin company to go public.
U.S. policymakers are currently considering stablecoin regulations that could grant banks the opportunity to participate in the industry. Representatives Patrick McHenry and Maxine Waters have reportedly made progress towards developing such a bill.
In conclusion, Ripple’s venture into the stablecoin market and the development of RLUSD signifies the company’s ambition to establish a presence in the rapidly growing sector. As regulatory frameworks evolve and competition intensifies, the stablecoin market is poised for significant expansion.