Tests are conducted in private beta until the token receives regulatory clearance.
Ripple, the firm behind XR, has announced it has started testing its recently revealed RLUSD stablecoin on Ethereum and the XRP network.
“Ripple USD is currently in its beta phase and is being rigorously tested by our enterprise partners,” said the company in a blog post on Aug. 9. “This phase is crucial for ensuring that the stablecoin meets the highest standards of security, efficiency, and reliability before it becomes widely available, and after receipt of regulatory approval.
XRP is down 6% to $0.57 today, the second biggest loser in the top 100 cryptocurrencies by market cap. The token has had a rollercoaster week amid broader crypto volatility due to Japan’s unwinding carry trade. That said, XRP is up 33% on the month.
Dollar Peg
Ripple USD (RLUSD) is pegged 1:1 to the dollar, and 100% backed by US dollar deposits, short-term US government treasuries, and other cash equivalents. These reserve assets will be audited by a third-party accounting firm, and Ripple will publish monthly attestations, said the company.
According to Ripple’s CTO David Schwartz, RLUSD will offer jurisdictional differences from the top stablecoin on the market, USDT, and comply to the same U.S. regulations as Circle’s USDC. Its use, said Schwartz on The Defiant’s June 3 podcast episode, will depend on each investors’ risk profile, in that U.S.-based entities will likely want to access U.S.-regulated stablecoins instead of Tether.
Regulatory Approval
However, the firm pointed out on X today that until it receives regulatory approval it will not be publicly available for trading or purchasing.
Ripple’s decision to wait for regulatory approval for its stablecoin comes just at a time when the company scored a major win against regulators. Although the company was forced by a New York City judge to pay $125 million for breaking U.S. securities laws, the penalty is a tiny fraction of the initial $2 billion fine sought out by the SEC.
“This is a victory for Ripple, the industry and the rule of law,” wrote Ripple CEO Brad Garlinghouse on Aug. 7. “The SEC’s headwinds against the whole of the XRP community are gone.”
The SEC has also sued two of Ripple’s top executives, CEO Brad Garlinghouse and co-founder Chris Larsen, in 2020, accusing them of illegally raising $1.3 billion from the aforementioned securities breach. In Oct. 2020, authorities dropped the case.
