Ripple Kickstarts RLUSD Stablecoin Minting On Ethereum & XRP Ledger
Ripple has commenced minting of its USD-pegged RLUSD stablecoin on both the XRP Ledger and Ethereum mainnet. As of yet, the blockchain firm has successfully minted 385 RLUSD on the above-mentioned networks. This move is expected to have significant impact on XRP price and Ripple’s market expansion.
Ripple Mints RLUSD Stablecoin On XRPL & Ethereum Mainnet
On August 22, Ripple minted 185 RLUSD tokens on the XRP Ledger. Thereafter, it minted an additional 200 RLUSD on the Ethereum network today. Although these initial minting activities are relatively small, Ripple’s move is more about testing the waters than diving in headfirst.
The RLUSD stablecoin, pegged 1:1 to the USD, is designed to be fully backed by U.S. dollar deposits, short-term U.S. government treasuries, and other cash equivalents. Moreover, the blockchain firm has assured the community that these reserve assets will be audited by a third-party accounting firm. Also, it will provide monthly attestations to maintain transparency.
Despite the buzz surrounding RLUSD, Ripple has been clear that the stablecoin is still in its testing phase and has not yet received regulatory approval. This has prompted the company to caution users against potential scams claiming early access to RLUSD.
Moreover, the introduction of RLUSD stablecoin comes on the heels of Ripple’s recent legal battles with the U.S. Securities and Exchange Commission (SEC). Judge Torres ruled that Ripple had violated securities laws in 1,278 institutional sales transactions, resulting in a $125 million penalty. This legal concern, however, has not deterred Ripple from pushing forward with its ambitious plans, as evidenced by the latest stablecoin launch.
Impact Of RLUSD Launch On XRP Price
Ripple’s RLUSD stablecoin could significantly push XRP price up. For context, the launch of a stablecoin brings significant liquidity to a blockchain network. Historical precedents support this view. Earlier, Ethereum price surged when MakerDao launched its DAI stablecoin on the Ethereum network.
Similarly, Tron price experienced a notable uptick when Tether began minting on the TRON network. Hence, a Coingape markets team analyst is optimistic that a similar trend could occur with the introduction of RLUSD.
Further, an XRP supporter, known as “WrathofKahneman” on X, highlighted a post comparing the percentage of value settled in stablecoins on Ethereum to the ETH price over time. He pointed out that while the comparison is not a perfect match due to differences in gas fees and smart contracts, it is notable that ETH price rose in alliance with the increase in stablecoin usage.
He expressed hope and excitement for the potential impact of RLUSD on the XRP Ledger. The ongoing beta phase of RLUSD is crucial for testing the stablecoin’s stability, security, and efficiency. However, the broader implications of this launch go beyond the technical aspects.
Ripple’s entry into the stablecoin market could have significant secondary effects on the XRP Ledger’s Automated Market Maker (AMM) total value locked (TVL), according to an XRP Ledger validator. They also highlighted the importance of Ethereum’s usage of the token.
Technical Standpoint
From a technical perspective, XRP price is currently in a tight range, forming a pennant that suggests a volatile breakout could be on the horizon. The latest Coingape analysis has identified two potential scenarios:
A bearish breakout followed by a price correction
A bullish breakout that could lead to a significant upswing. In either case, the introduction of RLUSD stablecoin is likely to play a role in shaping the market’s direction.
Amid uncertainty around SEC appealing Judge Torres’ decision, a breakdown below the pennant’s lower trend line could lead to a 4.5% price correction. Thus, XRP price could test support levels around $0.568 to $0.573. This could offer an accumulation opportunity if the price rebounds. However, a breakout above the pennant’s upper trend line and resistance at $0.626 could trigger a 9% price increase, targeting the $0.643 to $0.657 range.
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