Ripple’s New Stablecoin RLUSD Set to Launch for Trading on Tuesday
Ripple is set to launch its new stablecoin, RLUSD (Ripple USD), for trading starting Tuesday. This follows approval from the New York State Department of Financial Services earlier this month. The stablecoin will be backed by the U.S. dollar and available on both the Ethereum blockchain and XRP ledger, initially listing on several global exchanges. However, it will not be available on major platforms like Coinbase or Robinhood at launch.
A New Solution for Cross-Border Payments
Ripple’s move to introduce RLUSD comes as the company sees increasing demand in the cross-border payments market. “We’ve seen tremendous growth, particularly in cross-border payments, and we believe having our own native stablecoin can provide a more cost-effective, operationally efficient solution,” said Jack McDonald, Ripple’s Senior Vice President of Stablecoins, in an interview with CNBC.
This launch is significant in the context of the growing demand for alternatives to traditional payment systems. Ripple has long been a key player in the cross-border payments space, serving banks and financial institutions globally.
Ripple’s Legal Battles and Market Context
The launch of RLUSD also arrives amid a more favorable outlook for crypto regulation under President-elect Donald Trump’s administration. Ripple has faced challenges with U.S. regulators, notably the Securities and Exchange Commission (SEC), which sued the company in 2020, alleging that Ripple sold XRP as an unregistered security. However, a partial victory for Ripple came in 2023 when a judge ruled that XRP is a security when sold to institutions but not when traded to retail investors on exchanges.
Meanwhile, the market for dollar-backed stablecoins has surged, with the total market cap growing 50% this year alone. Tether (USDT) dominates with about 70% of the market, followed by USDC (issued by Circle) at around 20%. Ripple sees a gap for competition in this market, with McDonald noting, “The market is looking for alternatives to the incumbents—not to replace them entirely, but to offer something new. The current concentration in the market is a concern for regulators and new players.”
Ripple’s Strategic Position in the Stablecoin Market
Ripple, a 12-year-old company, has primarily focused on facilitating cross-border payments for banks, payment companies, and financial institutions, with a significant portion of its business outside the U.S. While stablecoins have traditionally been used for trading, Ripple views them as a complementary tool to enhance its business operations.
McDonald emphasized the continued relevance of both XRP and stablecoins in Ripple’s strategy: “There’s a place for both XRP and stablecoins in the payments sector. We’ve been advocates for stablecoins in our payment flows alongside XRP where it makes sense.”
XRP, Ripple’s native token, has been at the core of the company’s cross-border payment services since its launch in 2012. Although Ripple holds a significant amount of XRP, its focus has now expanded to integrating stablecoins into its offerings. The company is launching RLUSD on both the Ethereum blockchain and XRP ledger, enhancing the demand for XRP as a bridge asset within Ripple’s network.
Ripple’s Competitors and the Growing Stablecoin Sector
Ripple’s stablecoin initiative comes as the stablecoin market grows increasingly competitive. In November, several major crypto firms, including Kraken, Robinhood, and Galaxy Digital, revealed plans to launch their own joint dollar-backed stablecoin, USDG, as part of the “Global Dollar Network.” Meanwhile, MercadoLibre and fintech company Revolut are also exploring similar projects.
As the stablecoin sector continues to evolve, Ripple’s RLUSD is positioning itself as a key player in the rapidly growing market, offering an alternative to the dominant stablecoins and addressing the unique needs of cross-border payments.
