XRP is soaring after its creator, Ripple, announced that its planned and unrelated RLUSD stablecoin has finally received regulatory approval and is preparing to launch “soon.”
XRP is up 11% in the last 24 hours, after stumbling briefly on Tuesday as investors rushed to unload altcoins. The coin’s value rose from $1.98 to a high of $2.46, amid news that Ripple’s highly-anticipated stablecoin, which has been in development since April, is preparing to debut.
While the launch of RLUSD will not directly impact XRP, positive news about Ripple is often seen by investors as a boon for XRP, which is the native token on Ripple’s payment network, used to settle transactions.
Ripple CEO Brad Garlinghouse announced on Tuesday that the RLUSD stablecoin, a cryptocurrency designed to maintain a steady value in line with the U.S. dollar, has been approved by the New York Department of Financial Services. While stablecoins can operate without this approval, Ripple sought to be added to New York’s “greenlist” to gain credibility as a compliance-first company and access the New York market, ensuring that the coin complies with the state’s regulatory standards.
“This just in…we have final approval from @NYDFS for $RLUSD! Exchange and partner listings will be live soon,” Garlinghouse posted on X.
It’s still unclear when the new coin will premiere but it’s expected to be available on global exchanges and wallets including Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish.
Entering a crowded field
The stablecoin market is worth over $200 billion and is expected to grow to $2.8 trillion by 2028, according to Bernstein Research. Because stablecoins offer low volatility and fast settlement, they have become popular for international payments and as reserve assets in countries with high rates of inflation.
Despite the sector’s massive growth, two rival stablecoins—Circle’s USDC and Tether’s USDT— have about 90% market share, according to Coingecko data. While other companies have struggled to make inroads with their own challengers, Garlinghouse is confident that Ripple will outcompete these current leaders and become the “gold standard for enterprise-grade stablecoins.”
Toe Bautista, a crypto analyst at market maker GSR, told Fortune that while stablecoins are one of the most “ironclad businesses in crypto,” they are also one of the hardest to get off the ground because they require a substantial amount of capital to back each stablecoin with an equivalent fiat-currency.
Ripple has promised that the stablecoin will be 100% backed by U.S. dollar deposits, short-term U.S. treasuries and other cash equivalents. Bautista says Ripple holds large monetary reserves, including 80 billion XRP allocated to the company in 2012, that will make it easier for the company to deliver on this promise.
“Because XRP has been around for so long, and they have so much treasury reserves built up, they can actually sit at the table with Circle and Tether,” Bautista said.
