Ripple Labs kicked off the first tests of its USD-pegged stablecoin, Ripple USD (RLUSD), on the XRP Ledger (XRPL) and Ethereum mainnets. The company plans to deploy this fiat-backed token on additional blockchain networks in the future.
Ripple Labs has assured that RLUSD will be overcollateralized, with each unit backed 1:1 by USD reserves or short-term cash equivalents in a bank. To ensure transparency, the firm promised third-party audits and monthly reports on the reserves. Ripple also confirmed its ongoing commitment to both XRP and RLUSD, dismissing rumors that it might shift focus away from XRP.
The stablecoin is currently in beta testing with enterprise partners, and Ripple cautioned against any scams offering early access to RLUSD, which is not yet available for purchase or live trading.
This development follows a recent legal ruling in which Judge Analisa Torres imposed a $125 million penalty on Ripple Labs in the SEC’s lawsuit against the company. Ripple CEO Brad Garlinghouse described the penalty as a “victory,” particularly as the SEC had sought a much larger $2 billion fine.
Garlinghouse recently suggested on a podcast that the U.S. government is targeting Tether, sparking concerns of a looming regulatory crackdown.
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Tether CEO Paolo Ardoino criticized Garlinghouse for spreading “fear about USDT” and called his remarks hypocritical, especially since Ripple itself is currently under investigation by the U.S. Securities and Exchange Commission (SEC). He pointed out that Ripple is also planning to launch its own stablecoin in 2024, which could compete with Tether’s USDT.
Following the ruling, the price of XRP surged by 26%, reaching $0.64. Despite this positive momentum, Ripple’s Q2 2024 XRP Markets Report highlighted a 65.6% drop in transaction volume on the XRP Ledger, alongside a notable increase in the average cost per transaction.
Earlier in June, Ripple acquired digital asset custodian Standard Custody, which will be pivotal to its planned rollout of a USD-backed stablecoin and its broader ambitions in real-world asset tokenization.
Ripple’s ambition goes beyond its current payment network, eyeing a broader role in the financial sector by enabling institutions to use blockchain for various services.
