Ripple Labs is close to obtaining approval from New York’s leading cryptocurrency regulator for its new stablecoin, RLUSD. A report from Fox Business indicates that the New York Department of Financial Services (NYDFS) is likely to approve the stablecoin, with a launch date potentially set for December 4.
Ripple Poised to Introduce RLUSD Stablecoin
Once granted approval, Ripple would be positioned to legally market RLUSD to consumers, reinforcing its status as a significant participant in New York’s regulated digital finance sector and enhancing its presence within the overall stablecoin landscape.
However, neither Ripple Labs nor the regulator has provided comments or official statements to verify the information reported by Fox’s sources.
Ripple’s core operations focus on its decentralized global payments network, RippleNet, which utilizes blockchain technology to enable faster, cost-effective, and more efficient cross-border transactions for financial institutions and businesses.
This model serves as an alternative to the conventional global bank settlement system, SWIFT. XRP, Ripple’s native token, functions as a bridge currency for settlements, although its legal designation is still uncertain due to ongoing regulatory disputes with the US Securities and Exchange Commission (SEC).
The SEC has asserted that XRP should be categorized as an “unregistered security,” a viewpoint Ripple is challenging in an appeals case currently being considered by the Second Circuit.
This legal conflict has greatly impacted XRP’s market performance. After the SEC initiated its lawsuit in late 2020, XRP’s price dropped by more than 50%, leading to a market cap decline of around $16 billion. Since then, XRP has oscillated, frequently trading below the $1 level as Ripple confronts its legal trials.
Yet, recent developments—such as Donald Trump’s election win on November 5 and the official announcement of SEC chair Gary Gensler’s departure—have sparked renewed optimism among investors, propelling XRP’s price to $1.89 and making it the fifth largest cryptocurrency by market capitalization, surpassing $107 billion.
Entering a Competitive Stablecoin Arena
By launching RLUSD, Ripple seeks to establish a stable option for clients looking to engage with digital currencies without the volatility linked to XRP.
To comply with this regulatory landscape, Ripple is expected to secure a limited purpose trust charter, which would enable it to offer specific digital asset services without the complications tied to traditional banking regulations.
Moreover, the NYDFS provides a BitLicense that allows exchanges like Coinbase and Robinhood to deliver trading and custody services for cryptocurrencies.
Ripple’s move into the stablecoin market occurs as other companies, such as Paxos and Gemini, have already gained regulatory approval to introduce their stablecoins, PAX and GUSD, respectively.
Keith Grossman, president of Enterprise at MoonPay, expressed excitement regarding Ripple’s entry into the stablecoin arena, emphasizing the significance of “well-capitalized, highly regulated players” in the evolving global financial environment.
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