Ripple Burns 47 Million RLUSD Stablecoins in 24 Hours
Blockchain payments firm Ripple Labs Inc has burnt nearly 47 million RLUSD stablecoins within 24 hours. This significant token burn has led to speculation regarding potential announcements related to Ripple's forthcoming stablecoin and possible strategic moves to address regulatory and technical challenges.
The Stablecoin Journey: Ripple’s Big Ambitions
On Wednesday, the Ripple Stablecoin Tracker reported the burning of 46,676,120 RLUSD tokens in a single day, effectively removing most minted tokens from circulation.
Pretty much all #RLUSD was burned today.
On each Ethereum and XRP Ledger there is only around 100k RLUSD left. pic.twitter.com/05poexxvcE
— Vet (@Vet_X0) November 28, 2024
Token burning can reduce supply to increase scarcity or signal upcoming changes. As Ripple approaches its stablecoin launch, this could indicate a significant milestone.
In April, Ripple entered the stablecoin market, targeting the growing demand for dollar-pegged digital assets. Tether (USDT) leads the market with a $130 billion market capitalization, followed by Circle’s USD Coin (USDC) at nearly $40 billion. Ripple aims to establish a presence in this competitive environment.
Ripple is testing the RLUSD stablecoin with select enterprise partners. Unlike many stablecoins tied to a single blockchain, Ripple's token is designed for interoperability across multiple networks. This allows RLUSD to operate on various platforms, enhancing flexibility and adoption. In August, RLUSD was minted on the XRP Ledger (XRPL) and Ethereum, ensuring access to both ecosystems widely used in cross-border payments and DeFi applications. This strategy supports Ripple’s goal of positioning RLUSD as a dominant multi-chain stablecoin.
Ripple Faces Regulatory Roadblocks: The DFS Challenge
Despite advancements, regulatory approval remains a major challenge. Gaining authorization from the New York State Department of Financial Services (DFS) is essential for Ripple’s stablecoin to gain legitimacy in the US market.
The DFS enforces strict standards for issuing licenses, especially for stablecoins, which are crucial for trading, remittances, and DeFi applications. Ripple's capacity to navigate this regulatory landscape will be pivotal for its stablecoin ambitions.
Monica Long, Ripple’s President, indicated that some enterprise customers are already utilizing the stablecoin prior to its public release. While she suggested a potential 2023 launch, the official timeline remains unclear.