Author: Marcel Deer, CoinTelegraph; Compiler: Baishui, Golden Finance
RLUSD is a stablecoin developed by Ripple Labs, the organization behind the XRP cryptocurrency. RLUSD, or Ripple Labs USD, aims to provide a stable digital currency for trading and transactions.
As a stablecoin pegged to the US dollar, 1 RLUSD is equivalent to 1 US dollar. Each RLUSD maintains a 1:1 peg. These collateral assets are either US dollar deposits or cash equivalents.
On December 10, 2024, RLUSD received regulatory approval. The New York Department of Financial Services approved the new stablecoin on the XRP distributed ledger and Ethereum blockchain.
A week later, on December 17, RLUSD was officially launched and listed on five crypto exchanges: Uphold, MoonPay, Archax, Bitso, and CoinMENA. Over time, the availability of Bitcoin will expand to include well-known companies such as Bullish, Bitcstamp and Bitcoin Market.
RLUSD will be included in the Ripple payment network in 2025. The Ripple payment network will provide stablecoins for corporate customers who need global payments. It is expected to bring efficient and cheap cross-border transactions, especially for institutions.
Will RLUSD replace XRP? Ripple has confirmed that it is not a replacement for XRP. RLUSD is a form of digital cash.
RLUSD works similarly to other stablecoins that are mainly pegged to the US dollar, allowing individuals and institutions to deposit capital assets such as US dollars to mint each new coin. The cryptocurrency can be traded on the Ethereum and XRP Ledger blockchains.
There is nothing new in the technology and concept of Ripple's new stablecoin. It is a direct competitor to the established players of USDT and USDC.
Collateral support ensures that prices remain stable and avoids the volatility issues that exist in some other cryptocurrencies. This reliability allows businesses and traders to trade away from unpredictable price fluctuations.
RLUSD is available on both the XRP Ledger and Ethereum blockchains. Therefore, you can use it as a trading pair on an exchange or send and receive transactions with others.
Here are the differences between RLUSD and USDT and USDC:
Ripple Labs' RLUSD has strong advantages that make it reliable, trustworthy, and efficient, and is expected to become a leader in the stablecoin field.
Value Stability:RLUSD is designed to maintain a stable value, which is a feature that improves payments and transactions for crypto users.
Regulatory Approval:RLUSD is approved by NYDFS and Ripple Labs as a developer, a trustworthy crypto project. This gives it tremendous credibility after its launch.
Institutional Payment Focus:The token is designed for institutional payments, so organizations can expect smooth, fast, and cost-effective global transactions.
Wide Accessibility:Ripple is one of the biggest players in the blockchain world. They plan to launch RLUSD on multiple exchanges, and it will most likely be available on every major cryptocurrency exchange soon.
Multi-Blockchain Support:The new stablecoin will run on two blockchains – XRP Ledger and Ethereum. It can be used flexibly in a wide ecosystem.
Fully Backed Reserves:Funding is guaranteed, and each RLUSD is backed by an independent cash or cash equivalent reserve. You can always exchange RLUSD for USD at a 1:1 ratio.
(The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs in December 2020. The regulator accused Ripple of selling XRP as an unregistered security. It wasn't until July 2023 that Ripple achieved a partial victory when a judge ruled that XRP sold on exchanges were not securities, although institutional sales violated securities laws. The U.S. Securities and Exchange Commission (SEC) appealed the decision in October 2024, and the crypto world is still awaiting the final ruling.)
RLUSD beta testing results show that it is fast, reliable, and cost-effective, making it useful for a variety of financial use cases, including payments, trading, DeFi, and tokenization.
RLUSD cross-border payments:Cross-border payments may be the biggest use of stablecoins such as RLUSD. They allow you to send money anywhere in the world instantly and at minimal cost. Useful in a globally connected economy.
On/Off Rails: Cashing out in crypto can be a challenge. RLUSD provides a useful on/off rails for traders to enter and exit exchanges without volatility risk.
Everyday Payments: Ripple Lab calls the stablecoin "digital cash," suggesting they want it to be used for smaller, everyday payments. Another handy use for a fast and stable cryptocurrency.
Asset Tokenization: RLUSD enables you to tokenize real-world assets. Specifically, it allows institutions to provide collateral for trading real-world tokenized assets such as treasuries, commodities, and securities.
DeFi: With RLUSD integrated into the Ethereum blockchain, it will provide a trusted stablecoin to integrate into DeFi protocols. You shouldn’t be surprised to see it used as a trading pair on decentralized exchanges (DEX) or as a collateral option for lending protocols.
RLUSD has big plans. Ripple expects its market cap to exceed $2 trillion by 2028.
This is ambitious considering that Bitcoin only reached $2 trillion on November 11, 2024 in December — 15 years after its launch. The world’s leading stablecoin USDT was capped at $138 billion at the time.
With regulatory approval, RLUSD is set to launch in late 2025, and the outlook looks bright.
Details of the launch of Ripple’s stablecoin have been slowly being revealed over the past few months since testing began on the XRP Ledger and Ethereum mainnets in August. The differences between RLUSD and XRP are fairly stark, and it has been confirmed that it is not a replacement for XRP, but will complement Ripple's cross-border payment solutions.
Ripple has committed to stablecoin audits and transparency, and will conduct regular third-party audits of collateral reserves alongside monthly financial reports. However, the details of who will perform the audit process have not yet been determined.
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