Ripple begins testing RLUSD stablecoin on Ethereum and XRP

XRP issuer Ripple is moving forward with its stablecoin plans after CEO Brad Garlinghouse announced the idea during Consensus 2024.

Ripple (XRP) has begun work on a fiat-pegged token called Ripple USD or RLUSD as it targets a $160 billion stablecoin market currently dominated by Tether (USDT). The digital payments giant said that private beta testing has begun on XRP’s ledger and on the Ethereum mainnet, the cryptocurrency’s second-largest blockchain by market cap.

Testing, testing…RLUSD! We are excited to announce that Ripple USD (RLUSD) is now in private beta on the XRP Ledger and Ethereum mainnet. RLUSD has not yet received regulatory approval and is therefore not available for purchase or trading – please…

— Ripple (@Ripple) August 9, 2024

Speaking at Consensus 2024, Garlinghouse said the stablecoin market has a high ceiling and could become a $3 trillion industry before 2030. Ripple President Monica Long also noted that XRP will launch its own stablecoin token this year.

The August 9 announcement said that RLUSD will operate as a 1:1 US dollar-backed token. The company plans to use cash deposits, treasury bills, and cash equivalents as reserves. Ripple also committed to publishing monthly attestations and using a third-party accounting firm for audits. The official statement suggests a move toward regulatory compliance and approval.

Ripple enters the stablecoin sector

While Ripple’s CEO stressed that there is ample room for all players to grow, entering the stablecoin market means competing directly with existing players like Tether and Circle’s USD Coin (USDC).

Circle has demonstrated its ability to comply with extensive stablecoin regulations, particularly in Europe. Circle is also ready for an initial public offering in the United States and could become the first stablecoin company to list its stock.

US politicians are considering stablecoin regulations that could approve banks’ involvement in the space, with lawmakers including Patrick McHenry and Maxine Waters reportedly making progress toward such a bill.