On Aug. 9, Ripple Labs announced the first tests of its dollar-pegged stablecoin, Ripple Labs-US Dollar (RLUSD), on the XRP ledger (XRPL) and Ethereum mainnets, with plans to deploy the fiat token on additional blockchain networks in the future.
According to Ripple Labs, the upcoming stablecoin will be overcollateralized, meaning that each unit of RLUSD is backed by US dollar reserves or short-term cash equivalents in a bank, at a ratio of 1:1 with the US dollar. To guarantee transparency and accountability, Ripple also promised third-party audits of the underlying cash assets and monthly reports published on the reserves.
The crypto firm also reiterated its commitment to using both XRP and RLUSD to serve markets, quelling rumors that the firm would abandon XRP to focus on its new stablecoin.
In the announcement, Ripple Labs stressed that the stablecoin was in beta testing with enterprise partners and cautioned users against scammers purporting to sell or provide early access to RLUSD, which is not currently available for purchase or live trading.
Ripple hit with $125 million penalty in SEC lawsuit
The mainnet tests of RLUSD followed an Aug. 7 ruling from Judge Analisa Torres imposing a $125 million penalty on Ripple Labs in the Securities and Exchange Commission’s (SEC) lawsuit, which was first filed in 2020.
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Ripple CEO Brad Garlinghouse hailed the penalty as a “victory" against the SEC, which requested the court impose a staggering $2 billion fine against Ripple Labs for the alleged securities violations outlined in its lawsuit.
Unsurprisingly, the price of XRP responded to the news with positive price momentum, soaring by 26% and reaching a high of $0.64 on the same day the ruling was issued.
XRP Ledger sees a sharp decline in transactions
Despite positive developments for Ripple, the XRPL experienced a 65.6% drop in transaction volume in the second quarter of 2024, according to Ripple Labs' Q2 2024 XRP Markets Report.
Ripple’s report revealed a sharp decline from 251,397,881 transactions in the first quarter, to just 88,388,029 transactions in the second quarter, accompanied by a significant rise in average cost per transaction on the ledger.
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