Ripple's new stablecoin approved in New York sparks debate over regulation
- Ripple's RLUSD stablecoin will be available for trading starting December 17, 2024.
- The stablecoin is approved by the New York State Department of Financial Services and is issued on both Ethereum and XRP Ledger.
- This launch aims to provide an alternative to existing stablecoins and address market concentration concerns.
In December 2024, Ripple announced its new stablecoin, RLUSD, backed by the U.S. dollar, following approval from the New York State Department of Financial Services. The stablecoin is set to be traded starting Tuesday, marking a significant development in the company's plans for expanding its financial services, particularly in cross-border payments. Ripple will issue RLUSD on both the Ethereum blockchain and its own XRP ledger, hoping to provide an alternative to existing prominent stablecoins like Tether and USDC. Jack McDonald, Ripple's senior vice president of stablecoins, indicated that this launch is a response to the growth seen in stablecoin usage and the desire for operational efficiency in transactions. McDonald emphasized that the stablecoin aims to complement Ripple's ongoing business operations, which predominantly utilize XRP for cross-border payments, constituting approximately 95% of their transactions outside the U.S. With these developments, Ripple also aims to address ongoing market concerns about the concentration of existing stablecoins by providing an additional option for traders and institutions. Furthermore, the launch comes amidst optimistic expectations for more favorable U.S. regulations under the upcoming administration of President-elect Donald Trump, as the cryptocurrency sector anticipates a clearer legal framework moving forward. This approval and launch of RLUSD might pave the way for broader acceptance of stablecoins in the market, allowing Ripple to strengthen its position in the competitive landscape of digital currencies.