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Investors will be able to trade Ripple’s new stablecoin starting Tuesday, the company said, following approval by the New York State Department of Financial Services earlier this month.
The US dollar-backed stablecoin, called ripple USD or RLUSD, will be issued on the ethereum blockchain and XRP ledger and will first be available on a few global exchanges, with plans to expand to others in the coming weeks. It will not be available at first Coinbase or Robinhood.
“Part of the impetus for us to launch a stablecoin is the growth we’ve seen specifically in cross-border payments,” Jack McDonald, Ripple’s senior vice president of stablecoins, told CNBC. “As we’re using more and more stablecoins in our flows, that really piqued our interest that we should have our own native stablecoin that can be more cost effective and efficient to use.”
It’s underway among high hopes in the crypto industry For clearer and friendlier US regulations in President-elect Donald Trump’s next term. The Securities and Exchange Commission, led by crypto rival Gary Gensler, made an example of Ripple selling the company in a 2020 lawsuit. XRP as an unregistered security offering. A judge awarded Ripple a partial win in 2023, ruling that while XRP is a security when sold to institutions, not a security when sold to retail investors on exchanges.
The market cap of dollar-backed stablecoins is up 50% this year and about 15% since the election. Link (USDT) dominates with around 70%, followed by Circle USDCwhich makes up about 20%.
“The feedback we’re hearing from the market … is that people are looking for a replacement to replacements, not necessarily a full-scale replacement, but an alternative,” McDonald said. “There’s a concern about the concentration in the market today – it’s certainly something that regulators are looking at and the new institutions coming in don’t necessarily like that concentration.”
Ripple is a 12-year-old payments company that does much of its business outside of the US, serving banks, payment companies and other financial institutions that need to make cross-border payments. While stablecoins have historically been used for trading purposes, other use cases have emerged, and Ripple is primarily interested in complementing existing business, according to McDonald.
“There is a place in payments specifically for both XRP and stablecoins,” he said. “Over the years we have been a clear mentor to other stablecoins in our payments business, in addition to using XRP where it makes sense…we will continue to use XRP and stables.”
XRP is the original token of the open source XRP ledger and was created by the founders of Ripple in 2012. The company uses XRP in its cross-border payments business, about 95% of which it does. It takes place outside the USand is the largest holder of XRP coins.
“The fact that we’re launching RLUSD on ethereum and the XRP ledger, that creates more demand for XRP as a bridge asset to the XRP ledger, and therefore more credible assets that trade on the decks that are built in. The XRP ledger is good for XRP.”
the wave announced at the beginning of the year That it would bring a stablecoin to what has become an increasingly crowded crypto sector, which is growing even before the election. In November, Robinhood, crypto exchange Kraken, Galaxy Digital and others indicated they would launch dollar-backed stablecoinUSDG, in a “Global Dollar Network”. MercadoLibre also launched oneand Revolut is reported to be a fintech company discussing a similar initiative.
