Ripple officially announced the launch of the Ripple USD (RLUSD) stablecoin this Tuesday, promising to add more vibrancy to the booming cryptocurrency market. Backed by US dollars, US government bonds, and cash equivalents, RLUSD will trade on major platforms such as MoonPay, Uphold, Bitso, Archax, and CoinMENA, and will be available on both Ethereum and XRP Ledger.



The boom of XRP and the demand for stablecoins



This announcement comes in the context of $XRP , Ripple's standout token, which recently witnessed a strong breakout, reaching a 7-year high of $2.82 before adjusting to $2.45, a 122% increase over the past 30 days.



The launch of RLUSD comes as demand for #stablecoin grows significantly. The total market capitalization of stablecoins has now exceeded $200 billion, up substantially from $130 billion at the beginning of the year, according to data from DeFiLlama.



Transparency and regulatory compliance



RLUSD will be regulated by the New York State Department of Financial Services (#NYDFS ), the agency that licenses Ripple to operate as a 'special purpose trust company'. This is an important step, ensuring the product complies with the strict regulations of New York state.



Ripple is committed to transparency by publishing monthly audit reports from third parties, verifying the amount of collateral for RLUSD. This helps to enhance user trust in the context of the still unclear regulations regarding stablecoins in the US.



Legal challenges and the future of stablecoins



Although state-level regulations are evolving, the US still lacks a unified federal legal framework for stablecoins. The 'Clarity for Payment Stablecoins Act of 2023' was proposed last year but has not yet been fully passed. Lawmakers expect a legal framework to be discussed further in 2024 when the new Congress begins its session on January 3.



Competition from payment giants



Not only Ripple, but also major companies outside the crypto industry are stepping into the stablecoin market. For instance, #PayPal launched PYUSD last year, and recently, Robinhood along with a group of companies announced plans to support Paxos' Global Dollar (USDG) stablecoin.



Conclusion



With the launch of RLUSD, Ripple not only solidifies its position in the crypto market but also promotes the development of stablecoins – a crucial piece in the decentralized finance (DeFi) ecosystem and cross-border payments. This event marks a significant advancement for Ripple and opens up new growth potential for the global stablecoin market.