Ripple CTO David Schwartz Warns Against RLUSD FOMO Amid Launch Speculation
The stablecoin market has experienced remarkable growth in 2024, driven by rising cryptocurrency adoption and a surge in institutional participation. All eyes are now on Ripples newly approved stablecoin, Ripple USD, a.k.a. RLUSD.
But Ripples Chief Technology Officer, David Schwartz, addressed concerns over potential price anomalies for the asset as it prepares to launch.
Speculative Hype Around RLUSD Unnecessary
In a detailed statement on X, Schwartz explained that while Ripple USD (RLUSD) is designed to maintain a stable $1 peg, there could be temporary price fluctuations due to supply shortages during the initial launch phase. His comments were prompted by reports of RLUSD displaying an exorbitant price of $1,200 per unit on the Xaman trading platform, which stirred concerns within the crypto community.
Schwartz clarified that such inflated prices likely stem from speculative behavior or individuals seeking the honor of acquiring the first fraction of RLUSD on decentralized exchanges. However, he stated that these aberrations are unsustainable and will likely be corrected quickly by arbitrage activities, restoring the stablecoin to its intended $1 value.
The exec urged potential buyers to avoid succumbing to FOMOs warning that RLUSD is not a speculative opportunity but a tool for stability in cross-border payments. He stressed that the essence of a stablecoin is price stability, and any deviations from the peg, especially at launch, should not be misinterpreted as lasting trends.
Please dont FOMO into a stablecoin! This is not an opportunity to get rich.
Last week, Ripple CEO Brad Garlinghouse announced that RLUSD received final approval from the New York Department of Financial Services (NYDFS) and would soon debut, primarily targeting institutional players. RLUSD will play a crucial role in Ripples cross-border payment solutions, working alongside XRP to enhance liquidity and efficiency for global transactions.
New Players in Stablecoin Space
With a total market value of $211 billion, the stablecoin market is rapidly expanding as adoption grows. The San Francisco-based company is entering a space dominated by Tethers USDT and Circles USDC, which have market caps exceeding $140 billion and $42 billion, respectively, according to CoinGecko.
Ripple, however, sees an opportunity in the competition as it looks to position itself as a credible player capable of carving out market share. Schwartz, for one, had earlier predicted the stablecoin sector could exceed $2 trillion in value by 2028. The markets potential has also attracted major fintech players like PayPal and Robinhood.
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