Ripple’s Chief Technology Officer (CTO), David Schwartz, has issued an important warning to the crypto community as the company set to launch its anticipated stablecoin, RLUSD.
As we await the introduction of RLUSD, many speculations and expectations have flooded the market, however, Schwartz clarified things in a recent statement on X.
RLUSD May Experience Early Supply Shortage
David Schwartz noted a possible scenario of a shortage in the supply of RLUSD in the early days. However, he stressed that it would be temporary and the market would soon stabilize.
Additionally, he countered the expectations of investors who perceive RLUSD as an “opportunity to get rich.” He noted how individuals are willing to pay unusually high prices, particularly $1,200, to get a fraction of RLUSD upon launch, with hopes to acquire it at a rate lesser than $1.
However, Schwartz stressed that the price will quickly stabilize at close to $1 as expected for a stablecoin.
“The price will come back to very close to $1 as soon as supply stabilizes. If it doesn’t, something is very seriously wrong,” he said.
Schwartz’s statement came in response to a question posed by a community member who noticed an RLUSD price hike on the Xaman wallet. The CTO clarified that such tools will show the highest price a user is willing to pay for a fraction of RLUSD at the early stages.
“Tools will show you the highest price anyone is willing to pay, even if it’s just for a tiny bit. Maybe someone wants the “honor” of buying the first bit of RLUSD on the DEX,” he wrote.
Do Not FOMO Into Stablecoin
Meanwhile, Schwartz advised the community not to rush into stablecoin as it is not a get-rich-quick scheme. The general purpose of a stablecoin is to reduce volatility by achieving stability.
Schwartz noted that it is okay to be among the first to purchase RLUSD and spend a lot of money to acquire bits of it, however, he added that things will quickly stabilize and the price would not remain above $1.
Ultimately, he stressed that short-term price fluctuation is possible especially due to a shortage of supply or demand at the beginning phase, but it would be temporary as arbitragers would quickly fix the market.
Ripple Receives RLUSD Approval
Brad Garlinghouse, Ripple’s CEO, announced in a tweet last week that the New York State Department of Financial Services (NYDFS) has given the much-anticipated approval to launch its stablecoin.
While an exact launch date wasn’t given, Garlinghouse emphasized that it would be soon, potentially giving credence to the speculation of a launch before the end of the year.
RLUSD has been a focal point for the XRP and crypto community at large since Ripple announced its intentions to dabble into the stablecoin market in April.
In August, Ripple launched RLUSD on the XRPL and Ethereum network for testing with key industry partners, to ensure its functionality upon public launch.
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