After completing the development stage, Ripple, the company that issues XRP, has begun the testing phase of its stablecoin, Ripple USD (RLUSD).
Initially RLUSD is in a private beta version, being tested on the XRP Ledger and Ethereum networks.
Although it is not yet available to the general public, its official launch is expected to take place in late 2024 , provided it obtains the necessary regulatory approvals, the company reported.
“This is an important milestone and another step towards bringing more high-quality assets to the XRP Ledger, driving new opportunities, liquidity and institutional use cases for users, developers and applications,” Ripple said.
RLUSD is designed to maintain a stable peg to the US dollar. To ensure this stability, Ripple will back each RLUSD with assets such as dollar deposits , US government bonds, and other cash equivalents.
The reserve assets will be audited by an external accounting firm, and Ripple will publish monthly certifications, the company said.
These reserves are common in the largest stablecoins on the market, USD Tether (USDT) and USD Coin (USDC), with which Ripple aims to compete directly.
Currently, USDT and USDC account for 70.6% and 21% of the total stablecoin supply, respectively, according to data from DeFiLlama. This shows that it won't be easy to take market share from these giants.
USDT circulating in the market. Source: DeFiLlama.
Ripple CEO Monica Long introduced the new cryptocurrency last April. At the time, she said the stablecoin will be a “critical entry point” for scaling institutional and decentralized finance ( DeFi ) use cases.
In his view, the stablecoin will bring “trust to the XRP Ledger network and drive further adoption and development.”
The announcement of the stablecoin's testing comes at a crucial time for Ripple, just days after the litigation between the Securities and Exchange Commission (SEC) and the company appeared to have come to an end.
Judge Analisa Torres fined Ripple $125 million and prohibited it from continuing to violate U.S. securities laws. If the SEC does not appeal and the litigation actually concludes, a long and complex process will end, with significant implications for the company and the XRP cryptocurrency
With this new chapter started, the company is focused on consolidating its position in the cryptocurrency ecosystem, diversifying its offering with the introduction of RLUSD.
The launch of RLUSD adds to a series of initiatives that Ripple has launched, including a platform that allows governments and central banks to issue their own digital currencies (CBDC), taking advantage of XRP Ledger technology.
Additionally, Ripple is exploring the tokenization of real-world assets, such as Treasury bonds, in collaboration with the OpenEden platform.
