Ripple Labs is on track to launch its new stablecoin, Ripple USD (RLUSD), following expected approval from the New York Department of Financial Services (NYDFS) by December 4, according to sources cited by Fox Business.
RLUSD to Operate Under NYDFS Regulation
Once approved, Ripple Labs can legally issue RLUSD, a stablecoin overcollateralized and pegged to the U.S. dollar. This launch comes as Ripple faces an ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) over whether XRP constitutes an unregistered security. The case, currently in the appeals process, may see resolution if a shift in SEC leadership occurs under a potential Donald Trump presidency in January.
A Stable Alternative Amid Market Volatility
RLUSD aims to provide a steady alternative to XRP, mitigating the volatility often associated with cryptocurrencies. With no federal stablecoin regulations in place, Ripple’s reliance on state-level oversight through the NYDFS offers a practical route for launching RLUSD. This could involve obtaining a limited-purpose trust charter, similar to Paxos and Gemini, or using a BitLicense to facilitate crypto trading and custody.
Key Developments Leading to RLUSD
Ripple first revealed plans for RLUSD in April. In June, the company acquired Standard Custody & Trust Company, a NYDFS-chartered trust company with an existing license to provide crypto custodial services. Standard Custody will serve as the issuer of RLUSD once NYDFS grants approval.
In August, Ripple began beta testing RLUSD on the XRP Ledger and Ethereum mainnet. Plans are also in place to expand its use to other blockchains. Ripple emphasized the demand for stablecoins offering trust, stability, and utility, stating:
“Once RLUSD is available, Ripple will use both RLUSD and XRP in its cross-border payments solution to enhance the global customer experience.”
Partnerships and Transparency
In October, Ripple partnered with leading exchanges, including Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish, to ensure RLUSD is widely accessible. To bolster transparency, Ripple will conduct regular third-party audits of RLUSD’s reserves and publish monthly reports.
Conclusion
With RLUSD nearing its launch, Ripple Labs positions itself as a key player in the stablecoin market. By addressing regulatory challenges and securing partnerships, the company aims to meet the growing demand for reliable digital payment solutions
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