TLDR
- Ripple has begun beta testing its new stablecoin, Ripple USD (RLUSD), on the XRP Ledger and Ethereum mainnet.
- RLUSD is not yet available for purchase or trading, as it’s currently being tested with enterprise partners and awaiting regulatory approval.
- The stablecoin is designed to be pegged 1:1 to the US dollar, backed by US dollar deposits, short-term US government treasuries, and cash equivalents.
- Ripple plans to integrate RLUSD into its cross-border payments solution alongside XRP once it becomes widely available.
- The company recently faced a $125 million penalty in an SEC lawsuit but views this as a victory compared to the initially requested $2 billion fine.
Ripple, the cross-border payment firm, has announced the start of beta testing for its new stablecoin, Ripple USD (RLUSD), on both the XRP Ledger (XRPL) and Ethereum mainnet. This development marks a significant step in Ripple’s efforts to expand its presence in the cryptocurrency market and enhance its cross-border payment solutions.
RLUSD is designed to be a stablecoin pegged 1:1 to the US dollar. According to Ripple, the stablecoin will be fully backed by US dollar deposits, short-term US government treasuries, and other cash equivalents.
Testing, testing…RLUSD! We’re excited to share that Ripple USD (RLUSD) is now in private beta on XRP Ledger and Ethereum mainnet. RLUSD has not yet received regulatory approval and therefore is not available for purchase or trading – please be cautious of scammers who claim they…
— Ripple (@Ripple) August 9, 2024
To ensure transparency and trust, Ripple has committed to publishing monthly attestations and subjecting the reserve assets to audits by an independent third-party accounting firm.
Currently, RLUSD is in a private beta phase and is being tested with Ripple’s enterprise partners. The company emphasized that the stablecoin is not yet available for purchase or trading, as it still requires regulatory approval. Ripple cautioned the public against potential scams that might falsely claim to offer early access to RLUSD.
“We’re excited to share that Ripple USD (RLUSD) is now in private beta on XRP Ledger and Ethereum mainnet,” Ripple announced on social media. “RLUSD has not yet received regulatory approval and therefore is not available for purchase or trading – please be cautious of scammers who claim they have or can distribute Ripple USD.”
The introduction of RLUSD aligns with Ripple’s broader strategy to enhance opportunities, liquidity, and institutional use cases for various users, developers, and applications on the XRP Ledger. Ripple President Monica Long stated that the stablecoin complements XRP, the cryptocurrency underpinning the XRP Ledger.
Once RLUSD becomes widely available, Ripple plans to integrate it into its cross-border payments solution alongside XRP. The company believes that RLUSD will enhance the global payment experience for its customers, tapping into a market projected to grow to over $2.8 trillion by 2028.
Ripple’s move into the stablecoin market comes at a time when the total stablecoin supply has reached $172.29 billion, with USDT and USDC dominating the market at 70.6% and 21% respectively. By introducing RLUSD, Ripple aims to compete with these established stablecoins and become a key player in this growing market.
The beta testing of RLUSD follows a recent legal development for Ripple.
On August 7, Judge Analisa Torres imposed a $125 million penalty on Ripple Labs in a Securities and Exchange Commission (SEC) lawsuit filed in 2020.
Despite the penalty, Ripple CEO Brad Garlinghouse hailed the ruling as a “victory” against the SEC, which had initially requested a $2 billion fine.
The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company.
This is a victory for Ripple, the industry and the rule of law. The SEC’s…
— Brad Garlinghouse (@bgarlinghouse) August 7, 2024
The lawsuit, which alleged that Ripple had conducted unregistered securities offerings through the sale of XRP, partially concluded with the judge maintaining that Ripple’s institutional sales of XRP violated securities laws, while programmatic sales to retail investors did not.
As a result, XRP is not considered a security under US law, providing some regulatory clarity for Ripple and the XRP ecosystem.
Following the court ruling, the price of XRP responded positively, soaring by 26% and reaching a high of $0.64. However, despite these positive developments, the XRP Ledger experienced a 65.6% drop in transaction volume in the second quarter of 2024, according to Ripple’s Q2 2024 XRP Markets Report.
