Ripple Delays RLUSD Stablecoin Launch Pending NYDFS Approval
American blockchain payments firm Ripple Labs Inc has clarified the status of its RLUSD stablecoin. In a recent X post, the company confirmed that the RLUSD will not launch on the mainnet on December 4 as previously speculated.
Reasons for Delay in RLUSD Launch
Ripple is collaborating with the New York Department of Financial Services (NYDFS) to finalize approvals necessary for the RLUSD launch, ensuring compliance with regulatory standards. Ripple stated, “We are fully committed to launching under the supervision of NYDFS and upholding the highest regulatory standards.”
The NYDFS enforces strict regulations on cryptocurrencies and stablecoins, requiring firms to secure a limited-purpose trust charter before launching a stablecoin.
This announcement follows reports suggesting a December 4 launch date for the stablecoin, based on insights from sources familiar with the situation. FOX Business reporter Eleanor Terret noted that the NYDFS indicated intentions to approve RLUSD and suggested Ripple aimed for this date.
Despite the delay, Ripple remains dedicated to making RLUSD available to the public and will provide updates on its progress. The approval of RLUSD could position Ripple as a significant entity in New York's regulated digital finance market.
Ripple initially announced plans for the stablecoin in June. RLUSD is designed as a 1:1 USD-pegged asset, fully backed by USD deposits, short-term US Treasuries, and other cash equivalents.
By August, RLUSD underwent beta testing on multiple platforms, including the Ethereum mainnet and XRP ledger. Ripple anticipates that RLUSD will disrupt existing stablecoins such as USDC and USDT.
Use Cases for RLUSD Stablecoin
Ripple has aimed to utilize blockchain technology to enhance cross-border transactions for financial institutions, using XRP as a bridge currency for these transactions.
XRP is currently involved in ongoing litigation with the US Securities and Exchange Commission (SEC). A ruling by US Federal Judge Analisa Torres determined that XRP is not a security when traded on exchanges; however, the SEC has appealed this decision, maintaining scrutiny over XRP.
The upcoming RLUSD stablecoin may serve as an alternative payment option for institutions wanting to use Ripple’s services without the associated regulatory risks and volatility of XRP.
Ripple executives have indicated that both XRP and RLUSD will work together to advance their payment solutions. Additionally, users can consider RLUSD as a store of value, akin to other major stablecoins like USDC and USDT.