Ripple Introduces New Dollar-Pegged Stablecoin on XRP Ledger and Ethereum

San Francisco-based payments company Ripple has unveiled a new webpage detailing its upcoming stablecoin, Ripple USD (RLUSD). This stablecoin will be pegged to the US dollar and issued on both the XRP Ledger and the Ethereum blockchain.

Ripple states that RLUSD will be fully backed by cash and cash equivalents, ensuring it is redeemable on a 1:1 basis for US dollars. The company highlights that the availability of this stablecoin will be contingent on regulatory approval. Furthermore, Ripple emphasizes that RLUSD aims to be a “regulatory-compliant stablecoin.”

Ripple first announced its plans for this new asset in April. However, the U.S. Securities and Exchange Commission (SEC) raised concerns in a court filing in May, arguing that the planned stablecoin represented a “new unregistered crypto asset.”

Regulatory Challenges and Legal Background

The SEC’s filing is part of its ongoing lawsuit against Ripple, initiated in late 2020. The regulator accused Ripple of selling XRP as an unregistered security. In a significant development last year, US District Judge Analisa Torres ruled that Ripple’s automated, open-market sales of XRP did not constitute security offerings, which was a partial victory for the company. However, the judge agreed with the SEC that Ripple’s direct sales of XRP to institutional buyers were indeed securities offerings.

Ripple’s introduction of RLUSD reflects its commitment to expanding its product offerings while adhering to regulatory standards. The company’s focus on regulatory compliance aims to mitigate potential legal issues and foster trust among users and regulators alike.

Ripple’s ongoing legal battles with the SEC have brought significant attention to its activities. The launch of RLUSD represents a strategic move to diversify its portfolio and strengthen its position in the stablecoin market.