Rippleās Chief Technology Officer, David Schwartz, has cautioned investors about possible price fluctuations for RLUSD, the companyās upcoming U.S. dollar-pegged stablecoin.
As Ripple prepares for RLUSDās market debut, Schwartz addressed concerns on December 15, highlighting the risk of early supply shortages causing temporary price surges above the stablecoinās intended $1 parity.
Supply Shortages and Market Dynamics
In a post on X, Schwartz acknowledged that pre-launch speculation could lead to inflated valuations for RLUSD, citing instances of pre-market bids valuing the stablecoin as high as $1,244. āThere actually is someone willing to pay $1,200/RLUSD for a tiny fraction of one RLUSD,ā he noted, referencing an active Ripple wallet listing. Despite the excitement, Schwartz assured investors that such elevated prices would be fleeting.
āAs soon as supply stabilizes, the price will return to very close to $1. If it doesnāt, something is very seriously wrong,ā Schwartz wrote. He emphasized that arbitrageurs would play a critical role in normalizing RLUSDās value by selling at inflated prices and buying below $1 to balance supply and demand.
Schwartz also cautioned against fear-of-missing-out (FOMO) behavior, urging investors to recognize that RLUSD is not a get-rich-quick opportunity. āPlease donāt FOMO into a stablecoin! Its purpose is stability, not speculation,ā he added.
Regulatory Approval and Launch Timeline
Ripple has not announced a specific launch date for RLUSD, which recently received approval from the New York Department of Financial Services (NYDFS) on December 11. Ripple did not immediately respond to media inquiries about the stablecoinās rollout plans.
Testing for RLUSD began in August on Rippleās XRP Ledger (XRPL) and Ethereum mainnet, marking a significant step toward integrating the stablecoin into Rippleās ecosystem for cross-border payments. Ripple has positioned RLUSD as a solution to meet growing global demand for stablecoins, particularly in regions requiring fast, reliable, and cost-effective payment systems.
Investor Caution Amid Early Excitement
Schwartz reiterated that RLUSD has not yet received full regulatory clearance for public trading, urging investors to remain vigilant against scammers claiming to sell or distribute the stablecoin. Ripple has warned users to avoid unofficial sources until an official market release.
Despite these warnings, the excitement around Ripple and RLUSD continues to build. XRP, Rippleās native token, has also seen a remarkable price surge, climbing to $2.74 earlier this monthāa level not reached since January 2018. This marks a fivefold increase in XRPās value over the past 30 days, even as it recently dipped slightly to $2.41, according to BNC data.
A Stable Future Ahead?
While Rippleās RLUSD launch has sparked significant interest, Schwartz reminded investors of the fundamental goal of stablecoins: price stability. Short-term volatility during its launch may be inevitable, but the stablecoinās design aims to maintain its $1 peg, providing a reliable asset for payments and remittances.
Rippleās foray into stablecoins comes amid increasing demand for digital assets that bridge traditional finance and blockchain technology. With RLUSDās launch on the horizon, Ripple is positioning itself as a major player in the evolving stablecoin market. Whether RLUSD can navigate early challenges and deliver on its promise of stability remains to be seen.
