Chief technology officer David Schwartz of Ripple has warned investors about supply shortages and possible volatility associated with the introduction of the company’s USD-pegged stablecoin, RLUSD. He cautioned against jumping into early trades out of fear of missing out (FOMO) and emphasized the possibility of price swings once the stablecoin joins the market.
Although early supply and demand dynamics may result in brief price fluctuations, Schwartz stated that after the market equilibrates, the value of the RLUSD is anticipated to stabilize close to its planned $1 parity.
Schwartz addressed worries about pre-launch hype by responding to claims that speculative bids were increasing the RLUSD’s perceived value. One such bid, which came via the Xaman Ripple XRP wallet, priced a share of RLUSD at 511 XRP, or more over $1,200. Schwartz explained that rather than reflecting the true market worth of RLUSD, these inflated bids probably indicate a desire for novelty.
According to Ripple CEO Brad Garlinghouse, RLUSD will launch soon, subject to the New York Department of Financial Services’ final regulatory approval. As a supplementary asset to XRP, the stablecoin will improve Ripple’s cross-border payment options and give financial institutions more liquidity.
In order to preserve RLUSD’s price stability, Ripple executives see RLUSD as a strategic addition to the XRP ecosystem, taking advantage of XRP’s wide exchange availability. Early beta testing has shown that the stablecoin can prevent depegging and increase global liquidity, which is why it is intended to benefit institutional participants.
As the launch approaches, Ripple hopes to strengthen its place in the blockchain-based financial services market and broaden its product line to better meet the demands of institutions.
