- Ripple Labs’ new stablecoin, $RLUSD, is now live on Ethereum and the XRP Ledger
- RLUSD is active on several exchanges, including Bitso and Bitstamp, causing XRP to gain value
- The stablecoin aims to drive liquidity, facilitate cross-border transactions, and integrate with DeFi protocols
As reported yesterday, Ripple Labs’ new stablecoin, $RLUSD, is now live on the Ethereum network and on the XRP ledger (XRPL).
The stablecoin is now active on several cryptocurrency exchanges and brokers, including Bitso and Bitstamp. The debut of the new coin caused massive optimism around the Ripple ecosystem, causing its brother token, XRP, to gain value throughout the day.
Many are still unsure about the new role of the dollar-pegged crypto in the ecosystem and why Ripple Labs decided to create a new currency.
What is RLUSD For?
The new stablecoin is being implemented as a means to drive liquidity in the Ripple ecosystem, facilitate cross-border transactions, provide greater integration with DeFi protocols, and bridge fiat-to-crypto interactions in the crypto ecosystem.
As Ripple USD is available on two blockchains—the new stablecoin is considered to be very flexible and arguably easier to adopt.
Given Ripple is one of the leading firms in crypto-solutions for financial institutions, RLUSD can also serve as a more approachable option as its dollar peg makes it far less volatile than its brother token XRP.
Is RLUSD Safe?
Following the debacle of Terra (LUNA) a couple of years back, investors may still be skeptical of new stablecoins. However, the RLUSD launch captained by Ripple CEO Brad Garlinghouse took extra steps to make sure the new stablecoin adheres to strict regulatory standards in the U.S.
Before launching the coin—Ripple made sure to gain approval from the New York Department of Financial Services, considered by Garlinghouse as the “premier regulatory standard worldwide”.
“As the U.S. moves toward clearer regulations, we expect to see greater adoption of stablecoins like RLUSD.” — Brad Garlinghouse
RLUSD is backed on a 1:1 ratio by U.S. dollar deposits, as well as government bonds and other cash equivalents. The company is also committed to performing regular publicly-available audits to ensure transparency to the public and the market.
To adhere to this high standard of transparency in the financial market—Ripple recently added two major players in that endeavor, Former Governor of India’s Reserve Bank Raghuram Rajan, and former First Vice President and COO at the Federal Reserve of Boston, Kenneth Montgomery.
This development has apparently made the market extremely optimistic about Ripple. Throughout the day XRP gained over 5% in value and is currently trading at $2.61, adding up to a growth of 155% in the last 30 days.
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