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Ripple's New Stablecoin for Payments Debuts Tuesday

Payment and Card

Ripple, Financial Services, Donald Trump

Business Honor
17 December, 2024

Ripple launches RLUSD stablecoin to boost cross-border payments, approved by New York regulators.

Ripple is reportedly preparing to introduce its fresh stablecoin called ripple USD or RLUSD on Tuesday as an approval for the issuance came from the New York State Department of Financial Services earlier this month. The dollar-backed stablecoin, being issued on both Ethereum and XRP Ledger, will initially be available on some exchanges all over the world, but the availability will gradually increase, without coming to Coinbase or Robinhood.

According to Ripple's senior vice president of stablecoins, Jack McDonald, the company has launched RLUSD because the demand for cross-border payments is growing and the use of stablecoins in Ripple's operations is increasing. By creating its own native stablecoin, Ripple is trying to offer a more cost-effective and efficient solution for international transactions.

The launch of the coins is well-timed amidst optimism in the crypto community regarding potential regulatory changes under Donald Trump's incoming administration. Ripple has had an on-and-off relationship with regulators, especially after the SEC's lawsuit in 2020 that accused Ripple of selling XRP as an unregistered security. In early 2023, a judge awarded Ripple a partial victory in its SEC case by ruling that XRP, when sold to retail investors over exchanges, does not classify as a security.

The market of stablecoins has grown dramatically, with the dollar-backed stablecoin market cap going up by 50% this year. Tether and USDC dominate the space with a combined 90%. Ripple is trying to enter as an alternative to incumbents with growing concern over market concentration and new interest from institutions seeking alternatives, according to McDonald.

Ripple's RLUSD is viewed as an add-on product to its existing cross-border payments business, mostly operated outside the U.S. serving banks and financial institutions. With the launch of the stablecoin, Ripple continues its innovation in the payments space, parallel to its use of XRP for transactions.