Ripple is in the process of obtaining approval for its stablecoin RLUSD in New York. This implies that the cross-border payment corporation will be permitted to participate in the regulated US crypto market. This is one of the measures it is taking to demonstrate that it is regaining trust with the US authorities.
The company is planning to launch the product on December 4. If approved, as expected, Ripple will be able to legally sell its stablecoin, RLUSD, to the public. This will make it a big player in New York’s regulated digital finance market and the stablecoin ecosystem as a whole.
People familiar with the situation say that the New York Department of Financial Services has told Ripple that it will accept the product.
More about the RLUSD stablecoin
The stablecoin will be issued through Standard Custody & Trust Company, a Ripple-owned entity licensed by NYDFS.
RLUSD is a 1:1 US dollar-backed stablecoin introduced in June. It is 100% supported by US dollar deposits, short-term US government Treasurys, and other cash equivalents.
According to reports, the RLUSD stablecoin has been in beta testing on the Ethereum mainnet and Ripple’s decentralized public blockchain platform, the XRP Ledger (XRPL), since early August. Ripple has announced its intention to gradually broaden the scope of RLUSD to encompass additional blockchains and decentralized finance (DeFi) protocols.
In an X post, Justin Sun, Tron’s (TRX) founder and BitTorrent owner, has hinted at his 3.7 million followers at a potential RLUSD release on Tron (TRX). The potential integration has been met with enthusiasm by the XRP army, as both XRP and TRX have experienced significant growth in recent days.
Ripple explained that it is launching RLUSD to capture a portion of the stablecoin market, which is expanding at a rapid pace and is expected to reach a multi-trillion-dollar market by 2030. It is possible that it could pose a significant challenge to established participants such as Circle’s USDC and Tether’s USDT.
According to reports, Ripple burned approximately 47 million RLUSD stablecoins in a significant token fire last week. The Ripple Stablecoin Tracker account published an announcement that 46,676,120 RLUSD tokens were burned in a single day, thereby substantially reducing the supply by removing the majority of these minted tokens from circulation.
In addition, Brad Garlinghouse, the CEO of Ripple, recently declared that the RLUSD stablecoin will primarily be aimed at institutional investors.
Moreover, to facilitate the stablecoin’s distribution, the entity has partnered with crypto exchanges and platforms, including Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish.
Ripple’s supremacy battle in the crypto ecosystem
On the other hand, Ripple Labs-linked XRP has been experiencing an uptick in value, reclaiming its position as the third-largest coin by market cap in early December, which is currently standing at a price of $2.57.
By releasing a regulated stablecoin, Ripple will be able to provide a stable alternative to XRP for clients who wish to use digital currencies without being exposed to regulatory uncertainty and volatility.
This action will also put Ripple directly in competition with other well-established U.S. stablecoin issuers, including Circle, Paxos, and Gemini.
Monica Long, the president of Ripple, also stated in June that RLUSD was designed to be “complementary and additive” to XRP.
XRP will mostly be used as a “bridge currency” to settle deals. In the United States, however, the token is not yet regulated because the Securities and Exchange Commission is still arguing in court that it is an unregistered security.
The case, which is currently in the appeals phase in the Second Circuit, may be dismissed by the crypto-friendly Trump Administration upon its assumption of power in January.
RippleNet leverages blockchain technology to offer banks and businesses cross-border payment solutions that are more efficient, cost-effective, and rapid. It is advertised as an alternative to the global bank settlement system known as SWIFT.
The stablecoin’s price will be stabilized by paring to prevent de-pegging, while XRP’s significant availability on exchanges will contribute to the addition of liquidity to RLUSD.
New York State Department of Financial Services’ stance towards crypto
The United States SEC, under Gary Gensler, has had crypto on a chokehold of regulations during the Biden administration. Now, companies that want to offer digital assets have to meet a lot of rules. The regulations have encompassed security, privacy, and consumer protection.
On the other hand, business entities in New York offer certain services related to digital assets without having to follow the stricter rules of a traditional bank by getting a limited-purpose trust charter, which is what Paxos and Gemini have done.
Crypto business entities also use a “BitLicense,” which lets companies like Coinbase and Robinhood help people buy, sell, and store crypto.
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