Ripple Initiates RLUSD Stablecoin Testing on Ethereum and XRP Ledger

Ripple, the issuer of XRP, is accelerating its entry into the stablecoin market, following CEO Brad Garlinghouse’s remarks at Consensus 2024. The company has commenced private beta testing of its fiat-pegged token, Ripple USD (RLUSD), on both the XRP Ledger and Ethereum, the second-largest blockchain by market capitalization.

The stablecoin market, currently led by Tether (USDT), is valued at approximately $160 billion. However, Garlinghouse anticipates that the sector could expand to a $3 trillion industry by 2030. Ripple’s president, Monica Long, has suggested that RLUSD could be launched by the end of this year.

In an announcement on August 9, Ripple revealed that RLUSD will be backed 1:1 by U.S. dollars, with reserves held in cash deposits, treasuries, and cash equivalents. The company has committed to monthly attestations and audits by an independent accounting firm, indicating a proactive approach to regulatory compliance.

Ripple’s move into the stablecoin arena positions it as a direct competitor to established players like Tether and Circle’s USD Coin (USDC). Notably, Circle has already demonstrated its regulatory compliance capabilities, particularly in Europe, and is preparing for a potential initial public offering in the United States.

As U.S. lawmakers, including Patrick McHenry and Maxine Waters, work on advancing stablecoin regulations that could involve greater bank participation, Ripple’s entry into this space underscores the growing significance of stablecoins in the broader financial ecosystem.

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