XRP whales are buying as blockchain payments company Ripple officially launched its dollar-backed stablecoin, RLUSD, on several global cryptocurrency exchanges this Tuesday. The stablecoin is now tradable on the Bitso, Uphold, CoinMENA, MoonPay and Archax platforms, with additional listings expected soon.
Ripple RLUSD Stablecoin Launches Amid Price Volatility
RLUSD is designed to maintain a stable value against the US dollar and is compatible with the Ethereum (ETH) blockchain and XRP Ledger (XRPL). The latter was developed by Ripple Labs along with XRP.
However, shortly after launch, RLUSD experienced some volatility, with it trading at $1.50 on MoonPay early Tuesday. This was an unexpected premium over the intended value, Fortune Magazine confirmed.
Ripple’s Chief Technology Officer (CTO) David Schwartz predicted a potential price discrepancy in a previous post about X. He explained that the initial supply shortage could lead to RLUSD trading at a premium until the market stabilizes.
Schwartz reassured investors, saying, “However, as soon as supply stabilizes, the price will return to close to $1.” If not, something is very seriously wrong.”
Interestingly, RLUSD’s inflated price of $1.50 is a fraction of the price previously listed on Xaman, a cryptocurrency wallet for the XRP ledger. Ahead of the launch, Ripple supporters placed bids for the initial RLUSD tokens, with some investors willing to pay as much as 511 XRP (about $1,300 per token).
XRP reverts to $2.52 after an initial surge.
As activity on the XRP Ledger increased with the launch of RLUSD, interest in XRP itself surged. The token, which is used to settle transaction fees on the blockchain, rose 6% in value to a high of $2.71 on Monday. However, it later fell back to the $2.52 level.
Crypto analyst Ali Martinez reported that large investors, or “whales,” purchased an additional 30 million XRP prior to launch, pushing the price even higher. On the other hand, Bitcoin (BTC) and Ethereum showed declines of 2.6% and 4.6%, respectively, over the same period.
The launch of RLUSD follows recent regulatory approval from the New York Department of Financial Services and allows Ripple to strengthen its position in the payment network segment for cross-border transactions.
Jack McDonald, Ripple’s Senior Vice President of Stablecoins, highlighted the potential for institutional adoption, saying, “The stablecoin market is experiencing the next phase of growth, which will see more institutional adoption premised on institutional use cases.” He highlighted stablecoins as a “killer app” for global payments.
While initial interest in RLUSD is primarily driven by retail investors, Ripple aims to integrate the stablecoin into its payments business starting next year to facilitate international transactions for global banking and institutional partners.
Featured image of DALL-E, chart from TradingView.com
Source: NewsBTC.com