Ripple Labs is on the verge of receiving approval from New York’s top crypto regulator for its new stablecoin, RLUSD. According to a Fox Business report, the New York Department of Financial Services (NYDFS) is expected to greenlight the stablecoin, with a potential launch date set for December 4.
Ripple Set To Launch RLUSD Stablecoin
If approved, Ripple will legally be able to offer RLUSD to the public, solidifying its position as a major player in New York’s regulated digital finance market and expanding its footprint to the broader stablecoin ecosystem.
However, both Ripple Labs and the regulator have yet to comment on the matter or provide any official communication to further corroborate the information gathered by Fox’s sources.
Ripple’s primary business revolves around its decentralized global payments network, RippleNet, which leverages blockchain technology to facilitate faster, cheaper, and more efficient cross-border transactions for banks and businesses.
This approach serves as an alternative to the traditional global bank settlement system, SWIFT. Ripple’s native token, XRP, acts as a bridge currency for settlement, although its status remains uncertain due to ongoing legal challenges with the US Securities and Exchange Commission (SEC).
The SEC has argued that XRP should be classified as an “unregistered security,” a claim Ripple contests in an appeals case currently before the Second Circuit.
The legal battle has had significant implications for XRP’s market performance. Following the SEC’s lawsuit in late 2020, XRP’s price plummeted over 50%, resulting in a market cap loss of approximately $16 billion. Since then, XRP has fluctuated, often remaining below the $1 mark as Ripple navigates its legal challenges.
However, recent developments, including Donald Trump’s election victory on November 5, ant the official departure announcement by the SEC chair Gary Gensler, have spurred optimism among investors, boosting XRP’s price to $1.89 and positioning it as the fifth largest cryptocurrency by market cap, exceeding $107 billion.
Competing With Established Stablecoins
By entering the stablecoin market with RLUSD, Ripple aims to provide a stable alternative for customers seeking to utilize digital currencies without the volatility associated with XRP.
To operate within this regulatory framework, the firm is expected to obtain a limited purpose trust charter, allowing it to offer specific digital asset-related services without the complexities associated with traditional banking regulations.
Additionally, the NYDFS offers a BitLicense, which enables exchanges such as Coinbase and Robinhood to provide trading and custody services for cryptocurrencies.
Ripple’s entry into the stablecoin sector comes at a time when other firms, including Paxos and Gemini, have already secured approval to offer their stablecoins, PAX and GUSD, respectively.
Keith Grossman, president of Enterprise at MoonPay, expressed enthusiasm for the new entry into the stablecoin market, highlighting the importance of “well-capitalized, highly regulated players” in the evolving global financial landscape.
Featured image from DALL-E, chart from TradingView.com