Ripple’s RLUSD Stablecoin to Launch for Institutions Only
Ripple's RLUSD stablecoin will launch exclusively for institutional investors, aiming to bridge traditional finance with decentralized finance.
Initial Launch Limited to Institutions
Ripple’s upcoming RLUSD stablecoin will likely be restricted to institutional investors when it first launches. David Schwartz, Ripple's CTO, confirmed this in a social media discussion on September 8. The conversation arose when an XRP community member suggested that RLUSD should be limited to large financial institutions to protect it from misuse in illegal activities, such as money laundering.
Schwartz agreed, indicating that RLUSD will probably remain unavailable to retail investors, at least initially. He compared it to USDC and USDT, which are also primarily accessible to institutions rather than individual buyers. "You can’t buy USDC from Circle or USDT from Tether directly, so RLUSD will likely follow the same model," Schwartz explained.
Focus on Bridging Traditional Finance and DeFi
Ripple’s RLUSD stablecoin, introduced earlier in April, is currently undergoing trials on the XRP ledger and Ethereum network. It is designed to act as a bridge between traditional finance and decentralized finance (DeFi). The goal is to provide a secure payment method, offering a stable, USD-backed asset that can enhance global transactions while mitigating risks commonly associated with cryptocurrencies.
The stablecoin will be fully backed by US dollars and short-term US government bonds, ensuring it retains its peg to the USD. Ripple has promised monthly reserve attestations to enhance transparency and bolster user confidence. Brad Garlinghouse, Ripple’s CEO, has also emphasized delivering a smooth experience to users globally, ensuring both stability and trust in the asset.
Growing Competition in the Stablecoin Market
The launch of RLUSD comes at a time when the stablecoin sector is becoming increasingly competitive. Currently, USDT and USDC dominate the market, accounting for roughly 90% of the stablecoin market share, with a combined market cap exceeding $150 billion, according to DeFillama.
Stablecoins have become essential tools in the cryptocurrency world due to their price stability, making them highly useful for traders wanting to avoid the volatility of other crypto assets. They also provide an avenue for people in emerging markets to gain access to US dollars, an important factor for financial inclusion globally.
With RLUSD, Ripple aims to position itself as a key player in this space, offering an institutional-grade stablecoin that combines the best aspects of traditional finance and decentralized technologies.
