Ripple’s US Dollar-pegged stablecoin, RLUSD, is set for launch amid warnings of potential price fluctuations. David Schwartz, Ripple’s Chief Technology Officer, shared concerns about possible “supply shortages” during the early days of RLUSD’s release.
In a Dec. 15 post on X, Schwartz responded to reports of high pre-market bids for RLUSD. A Ripple wallet listed one RLUSD token at 511 XRP, equivalent to $1,244 at current prices. He stated that this bid likely reflected someone aiming to secure “the honor” of purchasing the first token.
Schwartz reassured users that RLUSD would return to its 1:1 parity with the US Dollar once supply stabilizes. He added,
If it doesn’t, something is very seriously wrong.
Schwartz urged investors to avoid overpaying, stating,
Please don’t FOMO into a stablecoin.
XRP’s Role in RLUSD Transactions
Ripple plans to use RLUSD alongside XRP to support cross-border payment solutions. According to Ripple, RLUSD and XRP will complement each other, with XRP providing liquidity and supporting stablecoin transactions.
Ripple CEO Brad Garlinghouse confirmed that RLUSD recently received approval from the New York Department of Financial Services (NYDFS). RLUSD will be overcollateralized with fiat reserves, ensuring a 1:1 redemption ratio with the US Dollar.
Ripple has designed RLUSD to enhance liquidity and improve transaction efficiency within its global ecosystem. The stablecoin’s beta testing phase demonstrated its pairing with XRP, helping to stabilize RLUSD’s price and ensure it stays pegged to the US Dollar.
RLUSD Expected to Increase XRP Utility
Georgios Vlachos, co-founder of Axelar, highlighted RLUSD’s potential to boost demand for XRP. He explained that RLUSD transactions would primarily settle on the XRP Ledger (XRPL) and the XRP-EVM sidechain.
“When you do those transfers, you pay for gas in XRP,” said Vlachos, noting that each transaction burns small amounts of XRP, adding to its utility.
XRP’s recent performance underscores this demand. On Dec. 3, XRP reached a seven-year high of $2.90 before stabilizing at $2.40. The price movement followed several developments, including RLUSD’s NYDFS approval and increased institutional interest in XRP.
Asset management firms like WisdomTree and Bitwise have filed for XRP exchange-traded funds (ETFs), further supporting the prominence of cryptocurrency. With a current market cap of $138 billion, XRP is the fourth-largest cryptocurrency, surpassing Solana earlier this month.
