Why Ripple’s RLUSD Stablecoin Could Be Off-Limits for Us Plebs

• Retail has seemingly been locked out of RLUSD as Ripple bets on institutions.
• David Schwartz’s claim has flipped the script on Ripple’s “Public” RLUSD rollout.
• Ripple’s approach has raised questions about who really benefits from RLUSD.

Cryptocurrency is evolving fast, and stablecoins are becoming key players in the financial landscape, offering the stability that traditional crypto lacks. But as more stablecoins emerge, who are they really meant for?

Ripple is entering the stablecoin market with its RLUSD, but its approach isn’t what most expect. Instead of targeting everyday users, the company has seemingly set its sights on a very different crowd. Here’s a closer look at Ripple’s strategic launch of its USD-pegged RLUSD and why it might not be for everyone.

Institutions Only? Ripple’s Bold Move

Ripple CTO David Schwartz recently dropped a bombshell about the launch of RLUSD, hinting it might only be available to institutional investors. In response to growing speculation, he posted , “It will probably only ever be available directly to institutions. Can you get USDC from Circle or USDT from Tether? Because I can’t.” Not exactly the broad public launch many expected.

This decision aligns with the growing trend of keeping stablecoins in the hands of big players. By limiting access to institutions, Ripple seems to be taking a cautious approach, likely aiming to avoid the pitfalls that have plagued other stablecoins, like USDT, which has faced scrutiny over alleged ties to money laundering and questions about its stability.

Avoiding Retail Risks

So why keep RLUSD out of retail hands? It’s likely a way to manage risks . Retail investors have shown themselves vulnerable to crypto’s ups and downs, and keeping RLUSD out of that space might prevent potential issues early on. 

Schwartz reassured followers that concerns about manipulation are unfounded, especially during the initial testing phases. But Ripple’s careful approach speaks volumes about their focus on stability and security before any wider release.

Ripple’s RLUSD Stablecoin Poised to Disrupt DeFi

Currently, RLUSD is being tested in private beta on both the XRP Ledger and Ethereum mainnet. Ripple CEO Brad Garlinghouse has hinted that a public release could be just weeks away, signaling that the company is ready to dive deeper into the institutional and DeFi spaces. 

Ripple wants to strengthen its payments infrastructure and bridge the gap between traditional finance and the emerging world of decentralized finance. With stablecoins playing such a crucial role in the DeFi ecosystem, RLUSD is expected to boost liquidity and attract developers to the XRP Ledger. 

Backed by US dollar reserves, government bonds, and cash equivalents, Ripple has also promised monthly third-party audits to maintain transparency and trust. Looking ahead, the company and the XRP community have bigger plans beyond RLUSD. By 2025, they aim to introduce smart contracts to the XRPL, further expanding the network’s capabilities. 

On the Flipside

• Schwartz’s explanation appears to be based on assumptions about RLUSD’s mechanics, using existing stablecoin models as reference points.
• Ripple’s institutional-only approach could limit RLUSD’s adoption, reducing risks but restricting its user base.

Why This Matters

David Schwartz suggested that RLUSD might be limited to institutions, reflecting uncertainty about Ripple’s final market strategy and aligning with current trends in the stablecoin market. Although Ripple often prioritizes institutions, it is still unclear whether they will eventually expand access to retail users, leaving the crypto community waiting for confirmation.

To learn more about the potential impact of the 2024 US election on cryptocurrency regulation, read here:
Ripple Co-founder Backs Harris, Snubs Trump’s Deregulation Plan

Facing regulatory hurdles in the US, Ripple is exploring launching their stablecoin in Japan. To learn more about Ripple’s global expansion plans, read here:
Ripple Eyes Japan RLUSD Debut as U.S. Regulators Stumble