Ripple’s RLUSD Stablecoin Can See Supply Shortages, CTO Says

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As a seasoned researcher with years of experience in the cryptocurrency market, I find myself intrigued by Ripple‘s latest move to launch its stablecoin RLUSD. David Schwartz, Ripple’s CTO, has raised some interesting points about potential volatility and the need for investors not to succumb to FOMO (Fear Of Missing Out).

David Schwartz, who serves as the Chief Technology Officer at Ripple, has hinted at potential supply limitations when their stablecoin, RLUSD, is rolled out. Yet, he advises investors against acting on fear of missing out (FOMO).

On Sunday, December 15th, a post on the X platform foretold potential fluctuations in the RLUSD stablecoin following its release, even though substantial purchases of the token were made. This is surprising given that the RLUSD was designed to keep an equal value with the US dollar.

Schwartz noted that the value of the yet-to-be-released stablecoin, RLUSD, was being artificially elevated due to pre-launch bids. For instance, on the Ripple wallet called Xaman, one unit of RLUSD was being traded for approximately 511 units of XRP, which equates to around $1244 at current prices. At this time, the 24-hour volatility of XRP is at 1.8%, while its market cap stands at $136.42 billion, with a 24-hour trading volume of $7.24 billion.

In Xaman, they’re displaying the converted price as $1,200 from RLUSD to XRP. Is this the anticipated overnight price adjustment that the XRP community has been eagerly waiting for… Will the XRP price align with the value of 1 RLUSD or is this a temporary issue until it becomes active?

— Digital Assets Daily (@AssetsDaily) December 11, 2024

The Ripple CTO added that the bid looked as if someone was willing to buy the first RLUSD coins as they go live into the market. Schwartz added:

You can be confident that the price will return nearly to its original value of $1 once the supply has balanced out. If this doesn’t happen, it suggests there could be some significant issues at play. Investing in a stablecoin based on fear of missing out (FOMO) is not an opportunity for quick wealth accumulation.

Last week, Ripple secured the final approval from the New York Department of Financial Services (NYDFS) for launching its RLUSD stablecoin. The stablecoin has successfully undergone testing on both the XRP Ledger and Ethereum networks, paving the way for multi-chain deployment to strengthen Ripple’s cross-border payment solutions.

Ripple to Integrate RLUSD and XRP for Enhanced Cross-Border Payment Solutions

As a crypto investor, I’m excited to announce that Ripple has revealed plans to integrate the newly available RLUSD stablecoin alongside XRP within their cross-border payment solution. This move is aimed at enhancing services for their global customer base. The company made this announcement during the beta testing phase of RLUSD in previous months.

Previously in June, Ripple’s president Monica Long expressed that RLUSD was intended to function as a supportive and additional asset alongside XRP. The idea is that having both assets together would boost liquidity and maintain the stablecoin’s price stability. It seems that Ripple perceives RLUSD as advantageous for XRP, since it ties the stablecoin’s price to XRP, thus preventing potential fluctuations or de-pegging problems.

Furthermore, Brad Garlinghouse, CEO of Ripple Labs, expressed that the RLUSD stablecoin would predominantly cater to large institutional investors involved in global remittances.

After Donald Trump’s election win in early November, Ripple’s native cryptocurrency, XRP, has experienced a significant surge. On the monthly chart, XRP is currently trading at approximately 140% higher, hovering near the resistance level of around $2.40. Investors are anticipating potential future growth towards $3.0.

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2024-12-16 13:26