Ripple Begins Beta Testing for New Stablecoin RLUSD

Ripple is moving forward with beta testing its new stablecoin, Ripple USD (RLUSD), on both the XRP Ledger and the Ethereum (ETH) mainnet. This new dollar-pegged digital currency, however, is not yet available for public purchase and is awaiting regulatory approval.

Ripple USD aims to offer stability by being fully backed by cash and cash equivalents. The stablecoin will be redeemable at a 1:1 ratio with US dollars. Ripple also plans to broaden the reach of RLUSD in the future, making it accessible on more blockchains and decentralized finance (DeFi) platforms.

The journey toward RLUSD began earlier this year. In April, Ripple unveiled its plans for the stablecoin. However, in May, the U.S. Securities and Exchange Commission (SEC) raised concerns, claiming that RLUSD represented an “unregistered crypto asset” in a court filing. This filing is part of the ongoing legal battle between the SEC and Ripple, which started in late 2020. The SEC accused Ripple of selling XRP as an unregistered security.

This week, Judge Torres imposed a $125 million civil penalty on Ripple for these institutional sales. Despite the legal challenges, Ripple is continuing to develop and test its new stablecoin, with a clear focus on regulatory compliance and market expansion.

The penatly comes after last year, US District Judge Analisa Torres delivered a partial ruling in Ripple’s favor. She determined that Ripple’s automated, open-market sales of XRP did not qualify as security offerings. However, she upheld the SEC’s claim that Ripple’s direct sales of XRP to institutional buyers did violate securities laws.