Ripple CTO Warns of ‘FOMO’ as RLUSD Stablecoin Prepares to Hit the Market
Schwartz highlighted the pre-market bidding on RLUSD that reached $1,244, driven by buyers eager to claim the “honor” of being the first to buy it.
Ripple's CTO David Schwartz has warned investors of potential price volatility for RLUSD, Ripple's stablecoin pegged to the US dollar, as it prepares to launch.
In a December 15 post on X, Schwartz addressed concerns about RLUSD’s market debut, acknowledging the possibility of an initial supply shortage that could push its price above its intended parity of $1.
No date has been announced for RLUSD to go live. Ripple did not immediately respond to a request for comment.
In August, Ripple announced that it had begun testing its new stablecoin on the XRP Ledger (XRPL) and the Ethereum mainnet. Ripple plans to use RLUSD to provide cross-border payment solutions for its global users.
Schwartz pointed to some pre-market bids valuing RLUSD at as high as $1,244, attributing this to excitement from buyers seeking to claim the “honor” of purchasing the first units of the stablecoin.
“There is actually someone willing to pay $1,200 per Saudi Riyal for a very small fraction of a single Saudi Riyal,” Schwartz wrote, referring to the Ripple wallet listing.
But he said such exaggerated valuations would not last long, stressing that "the price will return to a level very close to $1 once supply stabilizes. If this does not happen, something is very seriously wrong."
Schwartz described the market forces at play, noting the role of arbitrageurs in stabilizing the price of RLUSD. Arbitrageurs are expected to quickly normalize the value of RLUSD by selling at overvalued prices and buying at or below $1, which will correct supply and demand.
“Please don’t overbuy stablecoins! This is not an opportunity to get rich,” Schwartz added.
The warning comes as Ripple prepares to launch RLUSD after receiving approval from the New York Department of Financial Services on December 11.
Schwartz concluded by reminding investors of the primary purpose of a stablecoin: to have a “stable price.” While short-term price shifts are possible during launch, a stablecoin is designed to maintain its price at $1.
Meanwhile, XRP’s value surged to a seven-year high earlier this month, rising to $2.74 — its highest price since January 2018 — marking a five-fold increase over the past 30 days.
XRP is down about 1% over the past day, trading at $2.41, according to data from Coingecko.
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