- Popular blockchain developer Ripple has entered the stablecoin game, announcing the company is performing beta testing on the Ethereum and XRP Ledger networks.
- The coin, called Ripple USD (RLUSD), will be fully backed by US cash reserves.
- To ensure transparency, Ripple will conduct monthly third-party audits that will be released to the community.
- Approval for the asset is still a little while away, although some hope the SEC won’t be involved in the process as stablecoins aren’t typically considered securities.
The news cycle over the past week has revolved around last Monday’s catastrophic crash and the market’s gradual recovery since. Despite the macroeconomic focus, the blockchain world has continued chugging along. Leading the way is Ripple, the team behind XRP and XRP Ledger, who have begun testing their new product – a USD-pegged stablecoin, Ripple USD (RLUSD).
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Don’t Buy RLUSD Yet, Ripple Warns
The stablecoin is set to be hosted on the XRP Ledger and Ethereum networks, marking Ripple’s first entry into the tokenised USD market. Testing began on August 9th, and if successful, will push the coin toward going live once it acquires regulatory approval.
Via a post on X (formerly Twitter), Ripple was firm that while the new stablecoin is approaching official release, there are still a few hoops to jump through before investors can begin trading.
We’re excited to share that Ripple USD is now in private beta on Ledger and Ethereum mainnet…RLUSD has not yet received regulatory approval and therefore is not available for purchase or trading – please be cautious of scammers who claim they have or can distribute Ripple USD.
RippleInterestingly, stablecoins aren’t considered securities, and therefore don’t necessarily have to go through the notoriously strict SEC’s regulatory guidelines to acquire approval.
So, if Gary Gensler and co attempt to block the release of Ripple USD, things might get a little spicy.
New Stablecoin to Work With, Not Against, XRP
The new stablecoin will be backed 1:1 by cash reserves of USD – or equivalent – ensuring the token is overcollateralised to avoid some of the de-pegging events that have impacted other stablecoins.
A significant factor for a successful stablecoin is acquiring the community’s trust. To make sure investors have faith that Ripple USD is fully backed, the company has pledged to release monthly audits conducted by a third-party firm – and the documents will be available to the public.
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Ripple’s President, Monica Long, assuaged fears the foundation would move away from developing XRP (the Ledger’s native token) in favour of its new stablecoin product. She emphasised that RLUSD will be used to complement the current ecosystem, rather than replace it.
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