Ripple begins testing RLUSD stablecoin on Ethereum and XRP

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As a seasoned crypto investor with over a decade of experience under my belt, I must admit that the recent announcement by Ripple about their foray into the stablecoin market has piqued my interest significantly. Having witnessed the meteoric rise and fall of numerous digital assets, I have learned to approach every new development in this space with a healthy dose of skepticism.

Ripple, the entity behind XRP, is progressing with its plans for stablecoins following a hint from CEO Brad Garlinghouse at the 2024 Consensus event.

Ripple is now developing a stablecoin tied to the US dollar, called Ripple USD (RLUSD), aiming to enter the $160 billion stablecoin market predominantly controlled by Tether (USDT). The financial technology leader has initiated private testing of this new asset on both the XRP ledger and Ethereum‘s main network, which is the second-largest blockchain in terms of market capitalization.

Announcing a new development! The digital currency known as Ripple USD (RLUSD) is currently being tested in private beta on the XRP Ledger and Ethereum’s main network. At present, RLUSD has not been approved by regulatory bodies, so it cannot be bought or traded yet – beware of fraudsters who may try to deceive you into thinking otherwise.— Ripple (@Ripple) August 9, 2024

At the Consensus 2024 event, Garlinghouse shared with attendees his belief that the market for stablecoins has significant growth potential and could reach a value of $3 trillion by 2030. Additionally, Ripple’s President Monica Long hinted at the possibility of launching XRP‘s stablecoin token this year.

According to an announcement on August 9th, RLUSD (Ripple’s USD-linked token) will function with each token being equal in value to one U.S. dollar. To support this, the company intends to use cash reserves, government securities, and similar financial assets. Furthermore, Ripple has promised regular monthly reports and will engage a third-party auditor for review purposes. This announcement implies that RLUSD is taking steps towards meeting regulatory requirements and gaining approval.

Ripple to enter stablecoin industry

Joining the stablecoin sector involves going head-to-head with established players such as Tether and US Dollar Coins (USDC) from Circle, yet it’s important to note that Ripple’s CEO emphasized that there is plenty of space for everyone to thrive in this growing market.

As a crypto enthusiast, I’ve been closely watching Circle’s strategic moves. This company has proven its commitment to adhering to stringent stablecoin regulations across Europe, which is a significant step towards ensuring trust and stability in the digital currency market. Moreover, with plans for an initial public offering (IPO) in the United States, Circle could potentially make history as the first stablecoin firm to list shares on a U.S. exchange. This development not only expands their global reach but also paves the way for other companies following similar regulatory compliance paths.

American policy-makers are considering drafting rules for stablecoins, which may allow banks to enter this sector. Lawmakers such as Patrick McHenry and Maxine Waters have been making headway in the development of such legislation.

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2024-08-09 20:22