- Ripple’s RLUSD Stablecoin Faces Volatility Ahead of Launch, Warns David Schwartz
Ripple’s upcoming stablecoin, RippleUSD (RLUSD), is generating significant attention as it nears launch, with one trader placing a $1,200 bid for a single RLUSD token. This bid is raising concerns about potential volatility when the token goes live, prompting Ripple’s Chief Technology Officer, David Schwartz, to issue a warning to investors.
Early Volatility and Supply Shortages Expected
Ripple’s RLUSD stablecoin, pegged to the US dollar at a 1:1 ratio, is set to launch soon, following its approval by the New York Department of Financial Services. However, Schwartz anticipates initial volatility as the stablecoin hits the market. In a Dec. 15 post on X, Schwartz discussed how early bids were artificially inflating the value of RLUSD. Despite its design to maintain price stability, pre-market demand has driven up the price of RLUSD to as high as 511 XRP—about $1,244 at current rates.
“There is actually someone willing to pay $1,200 for a tiny fraction of one RLUSD,” Schwartz remarked, noting that the inflated bid was likely from someone eager to secure the first RLUSD token. However, he reassured that the price would stabilize once supply balances with demand, saying, “If it doesn’t, something is very seriously wrong.”
Ripple’s Strategy with RLUSD
Ripple sees RLUSD as a key component of its cross-border payment solution, with plans to pair it with XRP to enhance liquidity. CEO Brad Garlinghouse confirmed that RLUSD is designed to serve large institutional players, providing a stable digital asset for high-value transactions. Ripple believes that RLUSD will not only complement XRP but also strengthen its use in global payments, adding stability through its dual pairing.
Schwartz also emphasized that investors should avoid “FOMO” (fear of missing out) when it comes to RLUSD.
“Please don’t FOMO into a stablecoin! This is not an opportunity to get rich,” he cautioned,
highlighting the importance of understanding the token’s purpose as a stable and reliable asset rather than a speculative investment.
As Ripple gears up for the official launch of RLUSD, the crypto community will be closely watching for any signs of volatility or potential supply shortages in the early stages.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
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