When mentioning Ripple, most cryptocurrency investors often think immediately of XRP (XRPUSD) – the currency that has been associated with this brand for many years. However, stepping into the end of 2024, Ripple officially launched a new strategic product: Ripple USD (RLUSD) – a stablecoin pegged to the USD, promising to change the game in international payments.

The Birth Journey of RLUSD

Ripple announced plans to launch the RLUSD stablecoin in April 2024, conducting beta testing in August 2024, and by December 10, 2024, RLUSD was officially licensed for circulation by the New York State Department of Financial Services (NYDFS).

RLUSD is issued directly on the XRP Ledger (XRPL) – Ripple's private blockchain, allowing transactions with low fees and high speed. At the same time, RLUSD is also available on the Ethereum blockchain, expanding multi-chain usability.

Differentiating Factors of RLUSD

Unlike many other stablecoins that focus solely on individual users, RLUSD is designed for financial institutions and banks. Some strategic moves by Ripple include:

  • Acquiring technology: In August 2024, Ripple spent 200 million USD to acquire Rail – a company processing over 10% of global B2B stablecoin transactions. This technology is seen as a crucial piece for RLUSD to serve the enterprise payment market.

  • Expanding financial capabilities: Previously, in April 2024, Ripple spent 1.25 billion USD to acquire Hidden Road – a multi-asset brokerage to enhance clearing and financing capabilities for RLUSD.

  • Ensuring safety: Ripple chose BNY Mellon as the custodian for RLUSD reserves, similar to Circle (USDC), creating strong trust in its safety.

Thanks to this, RLUSD is evaluated as the only stablecoin currently actively conquering the institutional and banking sector, rather than just targeting the individual investor community.

Scalable Technology, Attracting Both Individual Users

Although focused on the institutional sector, RLUSD is gradually becoming popular in the retail community:

  • Integrating Chainlink to provide transparent pricing data on Ethereum.

  • In conjunction with MetaComp’s StableX, facilitating cross-border payments with over 31 currencies.

As a result, the retail trading volume of RLUSD currently accounts for 29% of the market capitalization, higher than the 26% of USDC.

Challenges and Potential

The only weakness of RLUSD is that it is still too new compared to USDC – a stablecoin that currently has huge liquidity. However, the growth rate is very impressive: market capitalization increased from 53 million USD (March 2024) to 666.6 million USD currently.

Ripple is also pursuing the ambition to obtain a national banking license. If successful, RLUSD will become the first stablecoin to have dual state and federal supervision, establishing a new standard of trust and transparency in the stablecoin market.

Advice for XRP Investors

With RLUSD being issued directly on XRPL, XRP holders can easily use RLUSD alongside XRP, optimizing for regular trading activities.

Though still young, RLUSD is showing rapid growth and a clear strategy aimed at banks, institutions, and even mainstream users. If Ripple continues to succeed in expanding technology and obtaining banking licenses, RLUSD could potentially become a dominant competitor against USDC in the near future.