As a seasoned analyst with over two decades of experience in the ever-evolving world of fintech and digital currencies, I find myself intrigued by Ripple’s latest move to limit the initial availability of their US dollar-pegged stablecoin, RLUSD, to institutional investors.
Ripple is on the verge of releasing its eagerly awaited USD-backed stablecoin, named RLUSD. But, as disclosed by Ripple’s Chief Technology Officer David Schwartz, this coin will first be accessible exclusively to large-scale financial institutions at launch.
RLUSD Limited to Institutional Investors
Schwartz has clarified in a recent comment on an X post that at its launch, RLUSD will not be directly accessible to individual retail investors. Instead, people can obtain it through exchanges or other intermediaries. This method is similar to how major stablecoins such as USDC and USDT are distributed; they focus on institutional access before becoming available to the general public.
It seems that these digital currencies (USDC from Circle, USDT from Tether) are primarily offered directly to institutions. Unfortunately, it appears they are not readily accessible for individual use like myself.
— David “JoelKatz” Schwartz (@JoelKatz) September 8, 2024
The choice to prioritize institutional investors at first stems from the need to handle regulatory issues and maintain compliance, especially in terms of anti-money laundering practices. By doing so, Ripple seems to be seeking to capitalize on established methods for stablecoin release, ensuring a seamless and compliant debut. As a result, retail users will initially have to access RLUSD through intermediary services.
Although this approach intends to create a safe and regulated setting for the token’s release, it might not meet the assumptions of individual investors who were hoping for a less mediated method to acquire RLUSD.
Ripple’s Broader Plans and Technological Developments
Introducing RLUSD is a key step in Ripple’s overall plan to strengthen their blockchain network. As mentioned by CEO Brad Garlinghouse, the stablecoin is currently undergoing final testing stages, with trials taking place on both Ripple’s and Ethereum‘s blockchains. This dual-compatibility across platforms aims to enhance RLUSD’s functionality and broaden its market attractiveness.
Besides its work on stablecoins, Ripple is also pushing forward with its technological development. The company aims to incorporate smart contracts into the XRP Ledger (XRPL), increasing its functionalities and fostering the creation of decentralized applications. Furthermore, Ripple intends to add an Ethereum Virtual Machine (EVM) sidechain to the XRPL, improving compatibility with other blockchains and providing developers with fresh resources for innovation.
XRP’s Short Squeeze
The cryptocurrency XRP has undergone some fluctuations in its price lately, mainly due to market influences. Notably, crypto expert Crypto Michael pointed out that in August, following Judge Analisa Torres’ ruling in the SEC versus Ripple case, XRP experienced a brief “squeeze,” where an increase in short positions caused the price to surge sharply. This phenomenon, known as a short squeeze, was temporary and resembled a short-lived price increase that occurred last year for XRP.
Over the past while, the instability of XRP has been exacerbated by ongoing difficulties within the XRP Ledger. These troubles have caused the market cap to plummet to a level not experienced since early 2022. However, despite these setbacks, XRP still holds the 7th position in terms of market capitalization and is presently attempting to bounce back. The investment community will be keeping a keen eye on XRP’s progress as they gauge whether it can rebound and build upon its latest advancements.
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2024-09-09 14:08