Ripple CTO Warns of Potential Supply Shortages for RLUSD Stablecoin
David Schwartz, Ripple's chief technology officer (CTO), indicated a potential "supply shortage" for the company's RLUSD stablecoin but advised investors against acting on fear of missing out (FOMO). In a post on X, he anticipated significant volatility for the RLUSD following its launch, noting large orders despite its design to maintain a 1:1 parity with the US dollar.
Schwartz mentioned that pre-launch bids were artificially inflating RLUSD's value. An example from a Ripple wallet named Xaman showed 1 RLUSD valued at approximately 511 XRP, equivalent to $1,244 at current prices.
In Xaman it’s showing the price to be a $1,200 RLUSD conversion to XRP. Is this the instant overnight price adjustment the XRP community has been waiting for… Will the price of XRP adjust to the value OF 1 RLUSD or is this a glitch until it goes “LIVE”? https://t.co/kzYZ18fVGD
— Digital Assets Daily (@AssetsDaily) December 11, 2024
He added that the bid seemed to indicate demand for RLUSD coins at launch, stating, “But rest assured, the price will come back to very close to $1 as soon as supply stabilizes. If it doesn’t, something is very seriously wrong. Please don’t FOMO into a stablecoin! This is not an opportunity to get rich.”
Recently, Ripple received final approval from the New York Department of Financial Services (NYDFS) to launch RLUSD. The stablecoin has been tested on both the XRP Ledger and Ethereum networks, facilitating multi-chain deployment to enhance Ripple's cross-border payment solutions.
Ripple to Integrate RLUSD and XRP for Enhanced Cross-Border Payment Solutions
Ripple announced plans to integrate RLUSD alongside XRP in its cross-border payment solution to benefit its global clientele. This was disclosed during RLUSD's beta testing phase.
In June, Ripple president Monica Long stated that RLUSD is designed to be “complementary and additive” to XRP, enhancing liquidity and stabilizing the stablecoin's price. Ripple aims for RLUSD to support XRP by anchoring its price to prevent de-pegging issues.
Ripple Labs CEO Brad Garlinghouse noted that RLUSD will primarily target institutional players in the cross-border payments market.
Following Donald Trump's victory in early November, Ripple's native cryptocurrency XRP experienced a significant rally, trading 140% higher and approaching resistance at $2.40, with speculation of further increases to $3.0.