Ripple CTO David Schwartz Warns Against RLUSD FOMO Amid Launch Speculation

The stablecoin market has seen remarkable growth in 2024, fueled by rising adoption of cryptocurrencies and rising institutional participation. All eyes are now on Ripple’s newly approved stablecoin, Ripple USD, also known as RLUSD.

But Ripple’s chief technology officer David Schwartz addressed concerns about potential price anomalies for the asset as it prepares to launch.

Speculative hype around RLUSD unnecessary

In a detailed statement on X, Schwartz explained that while Ripple USD (RLUSD) is designed to maintain a stable fix of $1, there could be temporary price fluctuations due to supply shortages during initial launch phase. His comments were prompted by reports of RLUSD showing an exorbitant price of $1,200 per unit on the Xaman trading platform, sparking concerns in the crypto community.

Schwartz clarified that these inflated prices likely come from speculative behavior or individuals seeking the “honor” of acquiring the first fraction of RLUSD on decentralized exchanges. However, he stated that these aberrations are unsustainable and will likely be quickly corrected through arbitrage activities, returning the stablecoin to its intended value of $1.

The executive urged potential buyers to avoid succumbing to FOMO warning that the RLUSD is not a speculative opportunity but a tool for stability in cross-border payments. He emphasized that the essence of a stablecoin is price stability and that any deviations from the anchor, especially in launch, should not be misinterpreted as lasting trends.

“Please no FOMO on a stablecoin! This is not a get rich opportunity.”

Last week, Ripple CEO Brad Garlinghouse announced that RLUSD received final approval from the New York Department of Financial Services (NYDFS) and would soon debut, targeting mainly institutional players. RLUSD will play a crucial role in Ripple’s cross-border payment solutions, working together with XRP to improve the liquidity and efficiency of global transactions.

New Players in the Stablecoin Space

With a total market value of $211 billion, the stablecoin market is expanding rapidly as adoption grows. The San Francisco-based company is entering a space dominated by Tether’s USDT and Circle’s USDC, which have market caps exceeding $140 billion and $42 billion, respectively, according to CoinGecko .

Ripple, however, sees an opportunity in the competition as it seeks to position itself as a credible player capable of gaining market share. Schwartz, for example, had previously predicted that the stablecoin sector could surpass $2 trillion in value by 2028. The market’s potential has also attracted major fintech players such as PayPal and Robinhood.

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