Arrival of RLUSD: Ripple’s USD Stablecoin for Ethereum, XRPL
Ripple has announced that its upcoming stablecoin will be called Ripple USD (RLUSD). The company expects to launch this year on the Ethereum network and the XRP Ledger (XRPL). The stablecoin has an alternative name called “Real Dollar” by Ripple CEO Brad Garlinghouse.
Ripple CEO Brad Garlington called the stablecoin a “real dollar.”
Ripple stablecoin name [is] RLUSD; I like to call it the real dollar or the Ripple USD,” Garlinghouse said at the XRP Ledger Apex panel discussion in Amsterdam.
Here comes the noise
The latest revelation comes after Ripple finalized its deal to gain formal protection on Tuesday. With this purchase, the company aims to facilitate the issuance of stable coins and the tokenization of real-world assets.
This is Ripple's second major acquisition, following Metacon's $250 million acquisition in May 2023.
The move expands Ripple's regulatory licences, adding a New York-based trust company to its portfolio, which includes various money transfer licences, a Singapore license and Irish registrations.
These valuable licenses can enhance Ripple's blockchain-powered enterprise solutions and services for institutional customers. In addition, Ripple has appointed Jack MacDonald, the CEO of Standard Protection, as the senior vice president of the company's stablecoin division.
Throughout his career, Macdonald has worked with investment banks, asset managers, financial services and, more recently, fintech and digital assets. His extensive knowledge and experience will be instrumental in leading the stablecoin team and bringing Ripple's stablecoin to market.
XRP is getting stronger
Ripple also announced the approval of Axelar, a bridging solution. The company plans to use Axelar to facilitate connections between the XRP Ledger and the corresponding side chain, built on the Ethereum Virtual Machine (EVM) level.
“Axelar is a battle-tested, production-ready bridge to bring XRP as a native currency to the XRPL EVM Sidechain,” Ripple said in a statement.
As reported, Axelar will simplify the user experience by allowing seamless exchange of XRP for encapsulated XRP (eXRP), which will serve as the native token for gas payments on the sidechain. Developed by Ripple and its partner Pierst Technology, the sidechain uses Evmos modular and customizable technology.
In explaining its choice, Ripple cited Acceler's proven track record and integration with major projects such as Uniswap and Microsoft. Previously, the company had planned to adopt the XLS-38 transverse chain bridge, but abandoned this solution due to concerns about user friendliness.
A legal challenge?
In April, Ripple announced plans to launch a US dollar-backed stablecoin. This is the first time to enter the stable coin sector, and Ripple will face competition from established players such as Tether (USDT) and Circle (USDC).
While Ripple's stablecoin has yet to launch, it has already been hit by the US Securities and Exchange Commission. In a response brief filed in May, the commission pointed out that Ripple's upcoming stablecoin is an unregistered security.
The SEC statement follows an ongoing lawsuit against Ripple for selling XRP as unregistered securities. The agency rejected Ripple's view that the sale of XRP was legal under an international license.
The SEC investigation and tensions between the agency and Ripple could derail its ambitions for a stable coin. The SEC's position on stablecoins is currently unclear. However, in the past, the SEC has taken legal action against the stablecoin Binance USD (BUSD).
Following a federal court ruling in July 2023 that determined Ripple's native token XRP was unsafe, the SEC filed an appeal to overturn the court's decision. The SEC also demanded that Ripple pay $2 billion to settle the case.
A long-running legal battle has reached its final stage. If upheld by the court, the $2 billion fine would be the second largest after Binance agreed to pay $4.3 billion in November 2023 to end a US Justice Department investigation.
