Ripple has achieved a significant breakthrough with the New York Department of Financial Services (NYDFS) granting final approval for its RLUSD stablecoin, positioning the company as a major player in the regulated stablecoin market.
Ripple, the digital payments company behind the XRP cryptocurrency, has just reached a historic regulatory milestone: final approval of RLUSD by the New York Department of Financial Services (NYDFS). The news, confirmed by company CEO Brad Garlinghouse on X, marks a decisive moment in the evolution of regulated stablecoins.
“This just in…we have final approval from NYDFS for $RLUSD,” Garlinghouse announced enthusiastically, marking the beginning of a new era for the company.
RLUSD Emerges as Conservative Alternative to Market Giants
RLUSD is not just another stablecoin in the market. With a 1:1 backing to the US dollar, Ripple’s new stablecoin is designed to compete directly with Circle’s USDC $1.00 24h volatility: 0.0% Market cap: $76.50 B Vol. 24h: $8.07 B , currently, the second-largest stablecoin with a $40 billion market cap, surpassed only by the giant Tether USDT $1.00 24h volatility: 0.0% Market cap: $186.78 B Vol. 24h: $56.93 B with its market capitalization exceeding $138 billion.
RLUSD’s backing structure follows a proven model: US dollar deposits, short-term US Treasury bonds, and other cash equivalents. This composition not only ensures its stability but also reflects Ripple’s serious approach to a market that has experienced catastrophic failures in the crypto ecosystem, such as Terra’s UST collapse in May 2022.
Unlike stablecoins backed by real assets, UST used an algorithmic mechanism based on burning and minting its sister token LUNA to maintain its dollar parity. This system collapsed when massive sell-offs broke the stabilization mechanism, sending UST from $1 to nearly zero in days and wiping out over $40 billion in market value.
UST’s collapse triggered a domino effect in the industry, leading to the bankruptcy of giants like Three Arrows Capital and later FTX, highlighting the critical importance of stablecoins backed by real assets and proper regulation.
Technical Implementation and Market Impact
With RLUSD, Ripple sends a clear message to the market: the era of algorithmic experiments is over; the future of stablecoins lies in transparency and real asset reserves.
The company has already completed tests on XRP Ledger and Ethereum, preparing RLUSD for launch on major partner platforms. This multichain integration will enhance Ripple’s cross-border payment solutions, leveraging the synergy between its star currencies RLUSD and XRP $1.85 24h volatility: 1.3% Market cap: $111.87 B Vol. 24h: $1.82 B .
Without a doubt, Ripple’s entry into the regulated stablecoin market not only strengthens its position in the crypto ecosystem but also signals a significant shift toward greater institutionalization of the sector.
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