Key Takeaways
- Ripple CTO cautions against FOMO during RLUSD stablecoin launch price spikes.
- RLUSD is pegged to the US dollar and competes with USDT and USDC.
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As Ripple’s RLUSD stablecoin launches, there could be early supply shortages that might lead to temporary price surges, with some buyers potentially willing to pay over the $1 target. David Schwartz, Ripple’s CTO, advises against making purchases out of FOMO, stressing that this is not an investment opportunity.
The warning came after a crypto community member spotted RLUSD displaying at $1,200 per unit on the Xaman trading platform, far above its intended $1 peg.
“There actually is someone willing to pay $1,200/RLUSD for a tiny fraction of one RLUSD. Tools will show you the highest price anyone is willing to pay, even if it’s just for a tiny bit. Maybe someone wants the ‘honor’ of buying the first bit of RLUSD on the DEX,” Schwartz explained.
He said that these price spikes were expected to be short-lived. Once the supply of RLUSD stabilizes, the price should quickly return to its intended peg of around $1.
Schwartz reiterated that the purpose of a stablecoin is to maintain a stable price, not to be a speculative asset for making quick profits.
“Please don’t FOMO into a stablecoin! This is not an opportunity to get rich,” he stressed.
Ripple is set to launch its stablecoin after securing final approval from the New York Department of Financial Services. According to Ripple CEO Brad Garlinghouse, the stablecoin will soon be available on platforms partnered with Ripple.
Designed to be pegged to the US dollar, RLUSD has undergone rigorous testing on both the XRP Ledger and Ethereum. The stablecoin is intended to complement XRP, Ripple’s native crypto asset.
With the new offering, Ripple aims to bridge the gap between traditional finance and decentralized finance (DeFi). This is expected to enhance payment infrastructure and unlock a wider range of use cases within the Ripple network.
Entering the stablecoin market, Ripple will compete with industry giants like Tether’s USDT and Circle’s USDC, which currently dominate the stablecoin market with market caps exceeding $140 billion and $42 billion respectively, according to CoinGecko.
Despite the stiff competition, Ripple sees an opportunity for credible players to gain market share. Schwartz has predicted that the stablecoin market could surpass $2 trillion by 2028.
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