Ripple CTO Warns Of Potential Volatility In New Stablecoin Launch

According to Cointelegraph, Ripple's Chief Technology Officer, David Schwartz, has cautioned about potential "supply shortages" and volatility surrounding the launch of Ripple's US Dollar-pegged stablecoin, RippleUSD (RLUSD). In a post dated December 15, Schwartz highlighted that the stablecoin might experience significant price fluctuations initially, despite its design to maintain a 1:1 parity with the US dollar. This volatility is attributed to several large orders for the token. Schwartz pointed out that some pre-market bids for the yet-to-be-released stablecoin were artificially inflating its value. He responded to a post showing 1 RLUSD valued at approximately 511 XRP, equivalent to $1,244 at current prices, on a Ripple wallet named Xaman. Schwartz remarked that someone seemed willing to pay $1,200 per RLUSD for a small fraction, suggesting it was more about the "honor" of purchasing the first RLUSD to hit the market. However, he reassured that the price would stabilize close to $1 once the supply normalizes, warning investors against succumbing to "FOMO" (fear of missing out) and emphasizing that this is not a get-rich-quick opportunity. On December 11, Ripple CEO Brad Garlinghouse announced that RLUSD had received final approval from the New York Department of Financial Services, with the official Ripple account indicating that the stablecoin would launch soon. Once available, Ripple intends to integrate RLUSD with XRP in its cross-border payment solutions to serve global customers, as stated in RLUSD's beta testing announcement. Ripple President Monica Long previously mentioned that RLUSD is designed to be "complementary and additive" to XRP. Ripple perceives RLUSD as beneficial for XRP, as the two will be paired to enhance liquidity and stabilize the stablecoin's price, preventing depegging. According to Ripple Labs CEO Brad Garlinghouse, RLUSD will primarily target large institutional players, aiming to leverage XRP's significant availability on exchanges to support RLUSD's liquidity.