Ripple's RLUSD stablecoin launches in Aave V3 Ethereum market

Aave, a decentralized lending platform, has announced the integration of Ripple's RLUSD stablecoin into its V3 $ETH Core market.

This new addition allows Aave users to both supply and borrow the stablecoin, although with initial supply limits of 50 million RLUSD and a borrowing limit of 5 million RLUSD.

RLUSD is a stablecoin that maintains a 1:1 peg with the US dollar and is available on the XRP Ledger and Ethereum blockchains. Ripple assures that each RLUSD token is fully backed by deposits in US dollars, short-term US Treasury bonds, and cash equivalents, thus guaranteeing its fiat value.

A distinctive feature of RLUSD that makes it attractive to institutional users is its security, reinforced by a recent modification in the XRP Ledger that implemented a "recovery" function. This function allows the issuer, under certain predefined conditions, to recover RLUSD tokens from users' wallets, adding an additional layer of control and security.

The introduction of RLUSD is considered a potential disruptor in the stablecoin market, where Tether's USDT and Circle's USDC currently dominate. Some industry leaders anticipate that RLUSD could intensify competition among major stablecoins and, furthermore, increase the attractiveness of XRP, the native cryptocurrency of the XRP Ledger, among investors by being closely related to this new product from Ripple.