Today marks a significant milestone in the world of cryptocurrency with the launch of RLUSD on global exchanges. This innovative stablecoin combines the stability of fiat currency with the efficiency of blockchain technology. Ripple, the company behind RLUSD, describes it as an “enterprise-grade stablecoin built on trust, utility, and compliance.” Backed by US dollar deposits, US government bonds, and other cash equivalents, RLUSD is set to undergo third-party audits to ensure transparency and trust.
Ripple aims to strengthen the connection between traditional fiat currencies and the rapidly evolving world of cryptocurrency, with a particular focus on enhancing cross-border payments. Ripple President Monica Long emphasized the importance of this launch, stating, “The release of RLUSD marks a new chapter, both for the XRP Ledger and Ripple, as it is set to play a vital role in our $70 billion+ payments flows.”
Looming Regulatory Uncertainty
The launch of RLUSD comes amidst a backdrop of regulatory uncertainty, particularly concerning the stance of the U.S. Securities and Exchange Commission (SEC) on stablecoins. Earlier this year, in April 2024, the SEC filed a remedies-related reply brief in the Ripple case, controversially labeling RLUSD as an unregistered crypto asset. This assertion has fueled debates within the crypto community, with some questioning the SEC’s stance despite the New York Department of Financial Services (NYDFS) approval.
Prominent voices in the community, such as a user on X, voiced skepticism, questioning if the SEC, under the leadership of Gary Gensler, could claim Ripple failed to register RLUSD. In response, Bill Morgan, a notable commentator, remarked, “That is correct,” while also highlighting that the SEC has made numerous incorrect statements about crypto assets. The term ‘crypto asset securities’ was notably used by the SEC, a term for which they later expressed regret to the court.
But “Ripple Does Not Care”
Despite the SEC’s assertions, Ripple appears unphased. “Ripple does not care about the statement,” Bill Morgan emphasized, adding that if it was intended as a warning or threat, it has been largely ignored or circumvented. The market, it seems, remains unfazed as well, with RLUSD now enjoying regulatory approval.
The ongoing discussions raise questions about whether the SEC or its outgoing Chair, Gary Gensler, can pose challenges for Ripple concerning the RLUSD stablecoin. Interestingly, the SEC has remained silent regarding the approval from the NYDFS. Ripple President Monica Long had earlier addressed potential concerns surrounding the impact of the RLUSD stablecoin on XRP, clarifying that both Ripple USD and XRP serve distinct purposes within the ecosystem. While XRP functions as a bridge asset facilitating cross-border transactions, RLUSD offers stability and compliance.
XRP’s Market Reaction
The launch of RLUSD has had a notable impact on the market, propelling the price of XRP to surge by 12% in a single day and 22% over the past week. XRP is currently trading at $2.64, marking an over 4% increase in the past 24 hours. Despite the regulatory uncertainties surrounding Ripple, investor sentiment remains optimistic, with hopes that the incoming SEC Chair, Paul Atkins, will shift the regulatory landscape away from enforcement-centric approaches.
As Gary Gensler is set to step down on January 20, 2025, the crypto community is watching closely for potential regulatory shifts. While uncertainty remains, Ripple’s strategic moves and the successful launch of RLUSD signal a promising future for the integration of fiat and blockchain technologies.
