Ripple is about to release a new stablecoin, RLUSD. The company's CTO discusses its potential and risks.
Opinion of Ripple's CTO
Ripple's Chief Technology Officer, David Schwartz, warned investors about potential supply constraints and price volatility of the new RLUSD stablecoin following its launch. Schwartz stated that despite forecasted volatility, the stablecoin's price will align with its planned $1 parity as supply and demand normalize. He also noted high bid values prior to launch, which may reflect a novelty interest in holding the initial RLUSD tokens rather than true market value.
Plans for RLUSD Release
According to Ripple CEO Brad Garlinghouse, the stablecoin will be introduced after receiving final approval from the New York Department of Financial Services. Ripple plans to integrate RLUSD in order to enhance cross-border payment solutions and provide liquidity to financial institutions. The company aims to leverage XRP's widespread exchange availability to maintain RLUSD's price stability.
Expectations and Warnings
Ripple maintains that its main objective is to support institutional participants, including beta testing to prevent de-pegging and intensifying global liquidity. Schwartz also cautioned against FOMO when purchasing the stablecoin, as this is not 'a time to get rich quickly.' While short-term price fluctuations due to supply or demand shortages are expected, they should not persist as the market will be balanced by arbitrage.
The launch of RLUSD is a significant step for Ripple as it seeks to strengthen its position in the fintech sector. The company continues to support institutional participants and aims to ensure the stability of the new stablecoin.
