Ripple’s XRP token is up 15% over the last 24 hours, rising from $2.08 to $2.39, after the company secured final approval from the New York State Department of Financial Services (NYDFS) to launch its Ripple USD (RLUSD) stablecoin.
Ripple’s native cryptocurrency has surged roughly 276% so far this year.
XRP Rips
The approval, confirmed by Ripple CEO Brad Garlinghouse, marks a remarkable milestone for the company. Ripple is now allowed to proceed with listing RLUSD on exchanges and partner platforms. Garlinghouse said that Ripple will soon announce the official launch date of RLUSD.
Ripple’s RLUSD stablecoin faced a delay in its launch due to regulatory issues with the New York regulator. The company’s original plan was to launch its product on December 4, however, unexpected developments in the approval process led to a postponement.
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The NYDFS requires companies operating in New York to obtain specific licenses, such as a BitLicense or a limited-purpose trust company charter. Despite the challenge, Ripple CTO David Schwartz said he was optimistic that RLUSD would debut by year’s end.
Also at the time, Ripple said it was working closely with the NYDFS to finalize the approval process and asserted that it would provide updates as soon as possible.
RLUSD is a stablecoin pegged 1:1 to the U.S. dollar, fully backed by highly liquid assets such as U.S. dollar deposits and short-term U.S. Treasuries. This robust backing structure ensures its stability and maintains its peg to the dollar, similar to other well-established stablecoins like Tether (USDT) and USD Coin (USDC).
Ripple expects that RLUSD will help facilitate cross-border payments and enhance liquidity in the digital asset markets.
The company intends for RLUSD to serve as a bridge between fiat currencies and cryptocurrencies, allowing businesses and individuals to easily convert between the two. The stablecoin will also support trading activities and can be used as collateral for real-world assets.
Following its first revelation of the stablecoin, Ripple initiated beta testing in August on the XRP Ledger and Ethereum.
RLUSD will soon enter a competitive stablecoin market which has long been dominated by USDT and USDC. As of December 11, USDT’s market cap stood at around $138 billion, while USDC’s at around $40.8 billion, per CoinGecko.
Competing with USDC is a formidable challenge, and dethroning USDT is even more challenging. In recent years, some entities, including online payments giant PayPal, have joined the stablecoin market, but none have yet to dethrone the two.
Yet Ripple executives see plenty of room for their stablecoin to grow. The company projects that RLUSD could achieve $2 trillion in market value by 2028 as the stablecoin market continues to expand.
Bernstein estimates that the stablecoin market could reach $2.8 trillion by 2028 with the increasing adoption and integration of stablecoins into mainstream financial systems. Analysts suggest that co-branded stablecoins issued by major financial and consumer platforms will facilitate smoother transactions and increase user engagement.
Bernstein also notes the growing-important role of stablecoin in both TradFi and DeFi, as well as more political support for the product compared to the wide range of crypto products.
Ripple flips Solana, Rivals Tether For Market Cap
XRP has surged in value, overtaking SOL to become the fourth-largest cryptocurrency by market capitalization. The asset briefly surpassed USDT to claim the third spot last week, but USDT has since reclaimed its position.
Following Donald Trump’s victory in the 2024 presidential election, there was a notable uptick in market sentiment across the cryptocurrency space, with XRP benefiting from this bullish trend. The resignation announcement of SEC Gary Gensler led to extra increases for XRP, with its prices crossing $2 for the first time since 2018.
The price of XRP has been mainly influenced by the ongoing legal battles with the SEC. The resignation of SEC Chair Gary Gensler was seen as a positive sign for Ripple. Year-to-date, the cryptocurrency has recorded a 276% increase. It’s 32% away from its all-time high of $3.4.
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