Ripple Labs has achieved a significant milestone with its RLUSD stablecoin receiving approval from the New York Department of Financial Services (NYDFS), as confirmed by CEO Brad Garlinghouse on 10 December. The approval paves the way for the stablecoin’s listings on partner exchanges, which Ripple plans to roll out imminently.
Positioned as a direct competitor to Tether’s USDT and Circle’s USDC, RLUSD is pegged 1:1 to the US dollar and backed by a combination of USD deposits, short-term US Treasury bonds, and other cash equivalents. Ripple envisions the stablecoin as a cornerstone for institutional clients, complementing its existing XRP token.
Ripple began testing RLUSD on the XRP Ledger and Ethereum mainnets in August, following its announcement in April. By October, the company had forged partnerships with exchanges such as Uphold, Bitstamp, Bitso, and MoonPay, alongside liquidity providers including B2C2 and Keyrock, to bolster the stablecoin’s launch.
The approval process encountered delays, with Ripple originally anticipating the NYDFS decision by 4 December. Despite this, Garlinghouse emphasised the company’s commitment to New York’s rigorous crypto regulations, which demand a BitLicense or trust company charter for firms operating in the state.
Ripple has ambitious projections for RLUSD, aiming for a $2 trillion market capitalisation by 2028. At a recent industry conference, Ripple’s CTO David Schwartz expressed confidence in the stablecoin’s imminent launch, underscoring its potential to transform institutional finance.
Currently, the stablecoin market is valued at approximately $192.8 billion, dominated by Tether’s $141 billion market cap. The space is increasingly competitive, with entrants like PayPal’s PYUSD and Ethena’s USDe adopting aggressive growth strategies. Ethena’s USDe, for instance, offers a 27% annual yield, driving its market cap to $5.6 billion.
Ripple’s RLUSD faces challenges in carving out a substantial share in this crowded market. However, the regulatory approval and partnerships position the stablecoin as a formidable contender in the evolving digital asset ecosystem.
This development comes amid a busy period for Ripple. Garlinghouse recently appeared on 60 Minutes to discuss cryptocurrency’s impact on the 2024 US elections, and the company continues its legal battle with the US Securities and Exchange Commission over XRP token classifications.
Ripple President Monica Long has stated that RLUSD will be “complementary and additive” to XRP, reinforcing the firm’s broader vision for digital finance. While Ripple navigates regulatory and competitive hurdles, the RLUSD stablecoin marks a bold step in its strategy to reshape the financial landscape.
