Ripple’s Chief Technology Officer, David Schwartz, has issued a cautionary note to investors ahead of the launch of RLUSD, Ripple’s U.S. dollar-pegged stablecoin. In a December 15 post on X, Schwartz acknowledged concerns about possible price volatility during RLUSD’s debut, citing potential supply shortages as a factor that could temporarily push its price above the $1 peg.
Ripple first announced RLUSD in August, revealing plans to test the stablecoin on both the XRP Ledger (XRPL) and Ethereum mainnet. The company envisions RLUSD as a cornerstone for cross-border payment solutions, aimed at streamlining transactions for global users. However, an official release date for the stablecoin remains undisclosed.
Schwartz highlighted early pre-market bids valuing RLUSD as high as $1,244—a staggering 1,200% premium over its intended parity. He attributed this enthusiasm to buyers seeking the prestige of acquiring the first RLUSD units, but he warned that these inflated valuations are unsustainable.
Market Dynamics to Drive RLUSD Stability
Despite the initial hype, Schwartz reassured investors that arbitragers would play a crucial role in normalizing RLUSD’s price. By buying at lower prices and selling at higher ones, arbitragers are expected to restore RLUSD to its $1 peg once supply stabilizes.
“Please don’t FOMO into a stablecoin! This is not an opportunity to get rich,” Schwartz cautioned, emphasizing that RLUSD is designed for price stability, not speculation. He urged prospective investors to remain patient and avoid overpaying during the token’s initial market phase.
The timing of this warning coincides with RLUSD’s recent regulatory approval by the New York Department of Financial Services, clearing the way for its official rollout. Schwartz’s message underscores Ripple’s commitment to transparency as it navigates the challenges of introducing a stablecoin to the competitive digital asset market.
XRP’s Recent Price Surge
While RLUSD garners attention, Ripple’s native token XRP has been making headlines of its own. Earlier this month, XRP surged to $2.74, its highest price since January 2018. This represents a remarkable fivefold increase over the past 30 days, signaling renewed investor interest and optimism surrounding Ripple’s ecosystem.
As Ripple prepares to introduce RLUSD, the company’s focus remains on delivering a stable and reliable product.
The post Ripple CTO Warns of RLUSD Stablecoin Price Volatility Ahead of Launch appeared first on TheCoinrise.com.
