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Ripple's new stablecoin RLUSD to focus on institutional investors

GrafaGrafa2024/09/09 08:05
By:Mahathir Bayena

Ripple's RLUSD (CRYPTO:RLUSD) stablecoin, set for release soon, will likely be restricted to institutional investors.

This information comes from David Schwartz, Ripple's Chief Technology Officer, who clarified the intention behind RLUSD in a discussion with an XRP (CRYPTO:XRP) user on social media on September 8.

Schwartz explained, “Probably only ever be available directly to institutions. Can you get USDC from Circle or USDT from Tether, because I can’t,” drawing a comparison to other stablecoins such as USDC (CRYPTO:USDC) and USDT (CRYPTO:USDT), which are also typically not directly available to retail investors from their issuers.

An XRP community member had suggested that RLUSD should be limited to large financial institutions to minimise potential risks, including misuse in illegal activities such as money laundering.

Schwartz confirmed this approach, indicating that RLUSD would probably remain exclusive to institutional investors.

Ripple introduced the RLUSD stablecoin in April, and it is currently undergoing testing on both the XRP Ledger and Ethereum network.

The stablecoin is pegged to the US dollar and aims to support a range of traditional financial and decentralised finance (DeFi) activities.

It is designed to facilitate secure payments, bridging the gap between traditional finance and the evolving DeFi landscape, alongside Ripple’s native token, XRP.

To ensure transparency, Ripple plans to issue monthly reserve attestations for RLUSD.

The stablecoin will be “fully backed by US dollars and short-term US government bonds,” providing a stable and reliable digital asset option for institutions.

This aligns with Ripple's broader strategy to offer a seamless user experience across global markets.

The launch of RLUSD comes as competition heats up in the stablecoin market.

Stablecoins like USDT and USDC currently dominate the sector, holding about 90% of the market share with a combined market cap of over $150 billion, according to DeFillama.

At the time of writing, the XRP price was $0.528.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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