Ripple Labs has announced the initiation of tests for its new United States dollar-pegged stablecoin, Ripple USD (RLUSD), on both the XRP Ledger (XRPL) and Ethereum blockchain networks.
This step marks a significant move in the cryptocurrency firm’s expansion strategy, aligning with its belief that the global stablecoin market could balloon to $2 trillion by 2028.
The RLUSD stablecoin is designed to be overcollateralized, with each token backed 1:1 by U.S. dollar reserves or equivalent short-term cash assets held in banks.
Ripple has emphasized its commitment to maintaining transparency with regular third-party audits and monthly reserve reports, ensuring that each RLUSD token is securely backed.
Contrary to speculation that Ripple might shift focus from its native cryptocurrency, XRP, the company has reaffirmed its dedication to supporting both XRP and RLUSD.
Ripple intends for these assets to coexist and complement each other in the marketplace, dispelling any rumours of XRP being sidelined.
The RLUSD is currently undergoing beta testing with Ripple’s enterprise partners. Ripple has cautioned the public against any fraudulent attempts to sell or offer early access to RLUSD, which is not yet available for purchase or trading.
This development follows closely on the heels of a legal battle with the U.S. Securities and Exchange Commission (SEC), where Ripple was recently fined $125 million in connection with alleged securities violations.
Despite the penalty, Ripple’s CEO Brad Garlinghouse called the outcome a “victory,” noting that the SEC had originally sought a much larger fine of $2 billion.
The legal resolution appears to have boosted confidence in XRP, which saw a significant price increase following the announcement.
However, despite the positive news, Ripple’s Q2 2024 report highlighted a sharp drop in transaction volume on the XRPL, falling by 65.6% from the previous quarter.
This decline comes amid rising transaction costs on the ledger, presenting a mixed picture of Ripple’s current market situation.
