Ripple’s CTO David Schwartz cautioned investors about potential volatility and a “supply shortage” following the launch of RLUSD.
By Bhushan Akolkar
Edited by Julia Sakovich
Updated
2 mins read
David Schwartz, Ripple‘s chief technology officer (CTO), recently stated the possibility of a “supply shortage” upon the launch of the company’s RLUSD stablecoin, however, warned investors not to rush in a FOMO.
In a post on the X platform on Sunday, December 15, Schwartz predicted significant volatility for the RLUSD stablecoin soon after its launch, while citing large orders for the token despite its design to maintain a 1:1 parity with the US dollar.
Schwartz pointed out that pre-launch bids for the unreleased stablecoin were artificially inflating its value. One example shared on X showed 1 RLUSD valued at approximately 511 XRP XRP $3.16 24h volatility: 1.0% Market cap: $182.04 B Vol. 24h: $10.43 B (worth $1,244 at current prices) on a Ripple wallet named Xaman.
In Xaman t’s showing the price to be a $1,200 RLUSD conversion to XRP. Is this the instant over night price adjustment the XRP community has been waiting for… Will the price of XRP adjust to the value OF 1 RLUSD or is this a glitch until it goes “LIVE”? https://t.co/kzYZ18fVGD
— Digital Assets Daily (@AssetsDaily) December 11, 2024
The Ripple CTO added that the bid looked as if someone was willing to buy the first RLUSD coins as they go live into the market. Schwartz added:
“But rest assured, the price will come back to very close to $1 as soon as supply stabilizes. If it doesn’t, something is very seriously wrong. Please don’t FOMO into a stablecoin! This is not an opportunity to get rich.”
Last week, Ripple secured the final approval from the New York Department of Financial Services (NYDFS) for launching its RLUSD stablecoin. The stablecoin has successfully undergone testing on both the XRP Ledger and Ethereum networks, paving the way for multi-chain deployment to strengthen Ripple’s cross-border payment solutions.
Ripple announced that as the RLUSD stablecoin becomes available, it will be integrated alongside XRP in the company’s cross-border payment solution to better serve its global customer base. The company made this announced during RLUSD’s beta testing in the previous months.
Earlier in June, Ripple president Monica Long stated that RLUSD was designed to be “complementary and additive” to XRP, with both assets paired to enhance liquidity and stabilize the stablecoin’s price. Sources suggest that Ripple views RLUSD as beneficial for XRP, by anchoring the stablecoin’s price to XRP to prevent any de-pegging issues.
Additionally, Ripple Labs CEO Brad Garlinghouse stated that the RLUSD stablecoin will primarily target big institutional players in the cross-border payments market.
Ripple’s native crypto XRP has shown a strong rally following Donald Trump‘s victory in early November. On the monthly chart, XRP is trading 140% up flirting around the resistance of $2.40 with investors eyeing further upside to $3.0.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
