TLDR
- Ripple is launching RLUSD stablecoin with pre-market bids reaching $1,244, despite intended $1 peg
- CTO David Schwartz warns against FOMO buying, emphasizing price will stabilize at $1
- RLUSD received NY Department of Financial Services approval on December 11, 2024
- The stablecoin will be used for Ripple’s cross-border payment solutions on XRP Ledger and Ethereum
- XRP recently hit seven-year high of $2.74, currently trading at $2.41
Ripple’s upcoming stablecoin RLUSD is generating unusual market activity before its official launch, with pre-market bids reaching as high as $1,244 despite being designed to maintain a one-dollar value. The company’s Chief Technology Officer, David Schwartz, has issued warnings to potential investors about these inflated valuations.
The stablecoin received its final approval from the New York Department of Financial Services on December 11, 2024, marking a key regulatory milestone. Ripple plans to integrate RLUSD into its cross-border payment solutions, allowing the stablecoin to operate on both the XRP Ledger and Ethereum networks.
In a December 15 post on social media platform X, Schwartz addressed the emerging pre-launch market dynamics. He noted that some traders are placing notably high bids, with one particular order on the Xaman wallet platform valuing a fraction of one RLUSD at 511 XRP, equivalent to $1,244 at current market rates.
As RLUSD goes live, there may be supply shortages in the very early days before the market stabilizes. There actually is someone willing to pay $1,200/RLUSD for a tiny fraction of one RLUSD. Tools will show you the highest price anyone is willing to pay, even if it’s just for a… https://t.co/LOx4rGiiiJ
— David “JoelKatz” Schwartz (@JoelKatz) December 15, 2024
The high pre-market valuations appear to be driven by traders competing for the distinction of purchasing the first available RLUSD tokens. However, Schwartz emphasized that such price levels are unsustainable and do not reflect the stablecoin’s intended functionality.
During the initial launch period, Schwartz anticipates potential supply shortages that could temporarily affect the token’s price. Nevertheless, he assured that market forces, particularly arbitrage traders, will help normalize the price back to its intended one-dollar peg once supply stabilizes.
Ripple’s stablecoin development began with testing phases on both the XRP Ledger and Ethereum mainnet in August 2024. The company has positioned RLUSD as a tool primarily targeted at institutional players in the cross-border payment sector.
The relationship between RLUSD and XRP has been carefully considered in the token’s design. Ripple’s President Monica Long has described RLUSD as “complementary and additive” to XRP, suggesting the two tokens will work together within Ripple’s payment ecosystem.
Market observers note that RLUSD’s stability will be supported by its pairing with XRP, which provides substantial trading liquidity across various exchanges. This pairing mechanism is expected to help prevent any deviations from the dollar peg.
Schwartz has been particularly vocal about cautioning against speculation in RLUSD, emphasizing that stablecoins are not designed as investment vehicles for profit. “Please don’t FOMO into a stablecoin! This is not an opportunity to get rich,” he stated firmly in his social media post.
The development of RLUSD comes during a period of strong performance for XRP, which recently reached a seven-year high of $2.74. This price point, achieved in late November 2024, represents the highest value for XRP since January 2018, though the token has since adjusted to around $2.41.
Ripple has yet to announce an official launch date for RLUSD. The company maintains that the stablecoin is still in its final preparation stages, with additional testing and infrastructure development ongoing.
$RLUSD is launching soon!
Stay vigilant and report any impersonations or scams. https://t.co/yqnAdBQSfW
— Ripple (@Ripple) December 10, 2024
Brad Garlinghouse, Ripple’s CEO, confirmed that the company’s focus for RLUSD will be on serving large institutional clients, suggesting a strategic approach targeted at business-to-business transactions rather than retail users.
The RLUSD launch preparation includes comprehensive testing of the token’s stability mechanisms and integration with existing payment systems. These tests are designed to ensure smooth operation across both the XRP Ledger and Ethereum networks.
The cryptocurrency community is closely watching RLUSD’s development, as it represents one of the first stablecoins backed by a major blockchain company with regulatory approval in New York. Current trading of XRP shows mixed market reaction, with the token experiencing a slight decline of approximately 1% over the past day.
Price monitoring platforms like Coingecko continue to track XRP’s performance as the market anticipates RLUSD’s official release. The latest data shows XRP maintaining its position among the top cryptocurrencies by market capitalization
