Is $RLUSD a Threat to XRP? – Bittime

Bittime - Is $RLUSD a threat to XRP? Check out Ripple's RLUSD impact on the price of XRP and the role of stablecoins in the crypto ecosystem.

Phe launch of Ripple’s stablecoin, RLUSD, sparked a big question among investors: Will this stablecoin be a threat to XRP? XRP price movements were depressed.

This coin recorded a sharp decline from $2.59 (around Rp. 41,440) to $2.31 (around Rp. 36,960) within 24 hours. This adds to speculation in the market regarding the impact of RLUSD on XRP.

This decline also caused XRP's market capitalization to fall 12% to $131.42 billion (around IDR 2,102 trillion), and XRP lost its position as the third largest cryptocurrency, being replaced by Tether (USDT).

However, is RLUSD really a threat to XRP, or does it actually strengthen XRP's position in the market? Crypto experts provide varying perspectives, but most agree that RLUSD is more of a complement than a competitor. Let's review this in more depth.

RLUSD and XRP: Partnership, Not Competition

Vincent Van Code, a prominent figure in the crypto community, provided clarification regarding the relationship between XRP and RLUSD. He emphasized that RLUSD will not replace XRP, but will instead strengthen the function of XRP in the XRP Ledger (XRPL) ecosystem.

XRP remains the core token in XRPL, which facilitates cross-border transactions and overcomes inefficiencies in traditional foreign exchange systems by directly matching multiple currencies with XRP, such as AUD/XRP or USD/XRP. This reduces transaction costs and increases efficiency.

The advantage of XRP Ledger is its ability to perform currency conversions automatically. For example, sending RLUSD to someone using RLYEN is made easier thanks to the decentralized and automated market maker (AMM) features in XRPL.

AMM helps stabilize prices and ensure smooth operations despite volatility in the market. In this case, XRP remains a vital “backbone” for this system.

Ripple Strategy

David Schwartz, Chief Technology Officer (CTO) of Ripple, emphasized that XRP is very important for XRPL because of its decentralized nature that does not depend on intermediaries. While RLUSD adds new features to the system, it works alongside XRP, not replacing it.

Many analysts believe that the launch of RLUSD could actually help increase the value of XRP in the long term, with some predictions pointing to the potential for a significant increase in the price of XRP, even reaching $10 (around IDR 160,000) within a year.

Ripple CEO Brad Garlinghouse also gave his views on RLUSD. According to him, RLUSD is aimed more at attracting large players in the institutional sector. Once RLUSD is launched, Ripple will use both RLUSD and XRP in its cross-border payment solutions, which will improve the user experience.

RLUSD: A Stablecoin with Huge Potential

Ripple's stablecoin, RLUSD, is scheduled to be available starting Tuesday, December 17, 2024 after receiving approval from the New York State Department of Financial Services (NYDFS).

The US dollar-backed stablecoin will be issued on the Ethereum and XRP Ledger blockchains, and will first trade on several global exchanges with plans for further expansion in the coming weeks. However, RLUSD will not be available on Coinbase or Robinhood at initial launch.

According to Jack McDonald, Ripple's senior vice president for stablecoins, one of the reasons for launching RLUSD was to capitalize on the growing growth of cross-border payments. This stablecoin is expected to provide a more efficient and cost-effective solution for cross-border payment needs.

Ripple plans to use RLUSD in its ecosystem, in addition to XRP, to improve user experience in global transactions. McDonald added that while stablecoins are often used for trading purposes, Ripple is more interested in using RLUSD to support their cross-border payments business.

The Role of XRP Amid the Growth of Stablecoins

XRP remains a major figure in Ripple's payments ecosystem. As the native token of the XRP Ledger, XRP has been used since its inception to facilitate international transactions, with the majority of Ripple transactions taking place outside the United States.

Ripple is also the largest holder of XRP, which shows that XRP is still the backbone of the Ripple ecosystem.

Schwartz also emphasized that with the launch of RLUSD on both blockchains—Ethereum and XRP Ledger—there will be more need for XRP as a bridge asset between various digital currencies.

The more assets that can be traded on XRPL, the better it is for XRP as a key “link” in cross-border transactions.

FAQs About RLUSD

What is RLUSD?

After receiving regulatory approval last week, Ripple stablecoin RLUSD launched today. It is a conventional stablecoin, fully backed by the US Treasury, bank deposits, and cash equivalents using the New York trust charter (NYDFS).

Will RLUSD Replace XRP?

While the launch of RLUSD will not have a direct impact on XRP, positive news on Ripple is often seen by investors as a boon for XRP, which is the native token on Ripple's payment network, used to settle transactions.

Where Can You Trade RLUSD?

RLUSD will initially be available through platforms such as Uphold, MoonPay, Archax, and CoinMENA, with plans to expand to exchanges such as Bitso, Bitstamp, Bullish, Mercado Bitcoin, Independent Reserve, and Zero Hash shortly after release.

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Reference

Binance Square, XRP News : Is RLUSD a Threat to XRP? Here’s What Experts Are Saying, accessed December 17, 2024.

CNBC, Ripple’s new stablecoin for payments will be available to trade Tuesday, accessed December 17, 2024.

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