Essential Insights
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Rapid Growth: Ripple’s RLUSD stablecoin has skyrocketed to nearly $900 million in market capitalization within a year, doubling in just three months from $400 million in August.
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Innovative Uses: Over $1.5 million in UBRI grants have been funded in RLUSD, and Tembo e-LV is now accepting RLUSD for payments, enhancing transaction speed and reducing costs in international payments.
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Strategic Integration: Ripple’s acquisition of Hidden Road for $1.25 billion is boosting RLUSD’s utility, with prime brokerage clients increasingly using the stablecoin for collateral and balance holding.
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Complementary Role: Experts believe RLUSD acts as a “liquidity amplifier” for XRP, enhancing its role within the ecosystem by providing a stable settlement layer for institutions.
Ripple’s Stablecoin RLUSD Nears $900M Market Cap in Under a Year
Ripple’s RLUSD stablecoin is gaining significant traction in the cryptocurrency market. As of October, it approaches a market capitalization of $900 million, according to the company’s latest independent attestation report. This marks a remarkable increase, doubling from $400 million just three months earlier.
Launched less than a year ago, RLUSD is pegged 1:1 to the US dollar. It is backed by a mix of deposits, short-term US Treasuries, and other cash equivalents. This backing provides users with both stability and security in a fluctuating market.
The growth of RLUSD has been noteworthy. Ripple has funded over $1.5 million in renewed University Blockchain Research Initiative (UBRI) grants entirely in RLUSD. Just last week, Brale, a platform that allows businesses to create USD-backed stablecoins, integrated with Ripple’s XRP Ledger. This integration enables quick transaction settlements in RLUSD.
Additionally, Ripple recently completed a $1.25 billion acquisition of prime brokerage firm Hidden Road. This firm’s clients are now reportedly using RLUSD for collateral and holding balances, as outlined by Jack McDonald, Ripple’s Senior Vice President of Stablecoins.
Another significant development occurred when VivoPower International PLC’s subsidiary, Tembo e-LV, began accepting payments in RLUSD. This move aims to streamline international payments, reducing long settlement times and high costs associated with traditional wire transfers. Tembo claims transactions with RLUSD can be completed almost instantly and at a fraction of the cost of conventional methods.
The choice to use RLUSD over Ripple’s established cryptocurrency, XRP, raises questions. While Ripple has not disclosed its rationale, RLUSD’s price stability likely makes it more suitable for payments and settlements compared to XRP’s volatility.
Some experts see RLUSD and XRP as complementary. Alexis Sirkia, from the Yellow Network, described RLUSD as a “liquidity amplifier” that supports XRP rather than competing with it. He noted that RLUSD’s integration within the US banking system provides the compliance and infrastructure needed for reliable settlements, particularly for institutions.
As RLUSD continues to grow, demand for XRP as a bridge asset may increase. Sirkia pointed out that RLUSD is already making waves in African markets through platforms like Chipper Cash and Yellow Card. This expansion could enhance the link between traditional finance and decentralized finance.
Ripple’s RLUSD is not just another stablecoin; it represents a significant step toward integrating cryptocurrency into everyday transactions. With its rapid growth and innovative applications, the stablecoin could reshape how businesses approach international payments and financial operations.
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This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
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