Ripple to Roll Out RLUSD Stablecoin on Dec. 17, Adds Former Central Bankers to Advisory Board

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What to know:

  • Ripple will begin rolling out its U.S. dollar stablecoin to the public on Tuesday, December 17.
  • The company also added two high-profile former central bankers to its stablecoin advisory board.
  • The company’s CTO warned of RLUSD price volatility due to early demand, with some traders willing to buy a token for as much as $1,200 per coin.

As a seasoned analyst with over two decades of experience in the financial industry, I have witnessed the evolution of digital assets and their potential to disrupt traditional finance. The imminent launch of Ripple’s U.S. dollar stablecoin, RLUSD, is yet another significant milestone in this journey.

On December 17th, Ripple, a blockchain service primarily serving enterprises that is linked with the XRP Ledger (XRP), announced it would make its eagerly awaited US dollar stablecoin available to users, following the token’s regulatory clearance.

Initially, RLUSD will become available for trading on various exchanges and cryptocurrency platforms such as Uphold, MoonPay, Archax, CoinMENA. Additional listings are planned on Bitso, Bullish, Bitstamp, Mercado Bitcoin, Independent Reserve, Zero Hash, among others within the next few weeks.

The company has added two new members to its advisory board for stablecoins: Raghuram Rajan, a previous governor of the Reserve Bank of India, and Kenneth Montgomery, who served as the first vice president and COO at the Federal Reserve Bank of Boston. These two individuals join other board members previously announced in October, such as Sheila Bair, a former chairperson of the FDIC, and Chris Larsen, co-founder and executive chairman as well as co-founder of Ripple.

The launch comes after Brad Garlinghouse, CEO of Ripple, announced last week that RLUSD had secured “final approval” from the New York Department of Financial Services, enabling its public release following testing. Fully collateralized by U.S. dollar deposits, U.S. government bonds, and cash equivalents, RLUSD aims to maintain a consistent value of $1.

Through RLUSD (Ripple’s USD-pegged stablecoin), Ripple is aiming to secure a portion of the swiftly expanding market for stablecoins, which is currently led by Tether’s $140 billion USDT and Circle’s $40 billion USDC. Stablecoins are a vital component linking digital asset markets with traditional finance, providing liquidity for trading, facilitating blockchain transactions, and increasingly serving as a cross-border payment method. Traditional financial entities such as banks and payment providers like PayPal, Visa, and Societe Generale have also ventured into the stablecoin sector as global regulators establish regulations for this asset class, bringing necessary regulatory clarity.

Initially, Ripple opted to debut its stablecoin under the New York Department of Financial Services (NYDFS) limited purpose trust company charter, a regulatory standard considered top-tier globally. This is according to Ripple CEO Brad Garlinghouse, who made this statement. As the United States continues to clarify regulations, he anticipates a surge in adoption for stablecoins like RLUSD, which provide practical use and are supported by decades of trust and knowledge in the industry.

At first, the digital currency called RLUSD will be accessible in the Americas, Asia-Pacific, United Kingdom, and Middle East regions through its collaborative partners for distribution and trading, as stated by Jack McDonald, Ripple’s senior vice president of stablecoins, in an interview with CoinDesk. Previously this year, Standard Custody & Trust, a company he formerly led that holds a New York Trust license, was acquired by Ripple.

Initially, the token cannot be used in the EU because Ripple lacks the required license to operate under the EU’s MiCAR regulations. However, the company is actively seeking opportunities to enter the European market.

RLUSD volatility warning

In simpler terms, the Regional School District (RLUSD) could experience unexpected fluctuations in its price since there’s a high initial interest among traders and a scarce availability of supplies.

As an analyst, I’m expressing a caution based on David Schwartz’s statement in an X post, where he serves as the Chief Technology Officer at Ripple. He anticipates potential supply shortages during the market’s initial phases before it reaches stability. He further elaborated that some traders are showing a strong interest and willingness to pay exceptionally high prices, such as $1,200 for a fraction of RLUSD tokens.

“Please don’t FOMO into a stablecoin,” he added. “This is not an opportunity to get rich.”

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2024-12-16 19:16