Ripple Initiates Beta Testing of RLUSD Stablecoin on XRP Ledger and Ethereum
Ripple Labs has announced the commencement of beta testing for its new USD-pegged stablecoin, Ripple USD (RLUSD), on both the XRP Ledger and Ethereum mainnet. This development marks a significant step in Ripple’s expansion into the burgeoning stablecoin market, projected to reach $2.8 trillion by 2028.
RLUSD is designed to maintain a 1:1 peg with the US dollar, backed by US dollar deposits, short-term US government treasuries, and other cash equivalents. Ripple has committed to transparency, promising monthly attestations and third-party audits of the reserve assets to ensure full collateralization.
The stablecoin is currently in a private beta phase, being tested by Ripple’s enterprise partners. This testing period is crucial for ensuring that RLUSD meets stringent security, efficiency, and reliability standards before its public release. Importantly, Ripple emphasized that RLUSD has not yet received regulatory approval and is not available for purchase or trading at this time.
Ripple plans to use both RLUSD and XRP in its cross-border payment solutions, aiming to improve global customer experience. The company has also outlined plans to expand RLUSD to additional blockchains and decentralized finance (DeFi) protocols in the future, indicating a broader strategy for integration into the cryptocurrency ecosystem.
The introduction of RLUSD comes at a time when Ripple is navigating significant legal challenges. Recently, the company was ordered to pay a $125 million penalty in the ongoing Securities and Exchange Commission lawsuit, a figure substantially lower than the $2 billion fine initially sought by the SEC.
Despite these developments, the XRP Ledger has seen a sharp decline in transaction volume, dropping 65.6% in the second quarter of 2024 compared to the first quarter. This decrease in activity presents an interesting backdrop for the introduction of RLUSD.
As Ripple moves forward with RLUSD, it joins a competitive stablecoin market currently dominated by Tether’s USDT and Circle’s USDC. The success of RLUSD could potentially reshape the landscape of cross-border payments and provide new opportunities for users, developers, and applications within the XRP ecosystem.
Ripple has cautioned users to be wary of scams claiming to offer early access to RLUSD, emphasizing that the stablecoin is not yet publicly available. As the beta testing progresses, the crypto community will be watching closely to see how RLUSD performs and what impact it may have on the broader stablecoin market.
