Ripple’s RLUSD stablecoin has officially received approval from the New York Department of Financial Services (NYDFS), marking a pivotal moment in the evolution of blockchain-based financial instruments. Vincent Van Code, a renowned crypto figure, called this milestone “one of the biggest things that has happened in crypto,” highlighting RLUSD’s classification as the first “bank-grade” stablecoin.
This approval distinguishes RLUSD from other stablecoins like USDC and USDT by setting a new standard for regulatory compliance. The stablecoin’s unique designation underscores its adherence to stringent banking standards, offering the crypto community a regulated financial instrument backed by robust oversight.
What NYDFS Approval Means for XRPL and Ethereum
The approval of RLUSD carries broader implications for the XRP Ledger (XRPL) and Ethereum blockchains, the platforms hosting the stablecoin. While these networks are not officially certified as banking grade, Van Code pointed out that the approval validates their capability to support regulated financial assets.
Key features of these blockchains—such as decentralization, immutability, and transparency—align closely with the rigorous technical and security requirements demanded by financial regulators. Additionally, NYDFS oversight ensures these platforms can support compliance needs, including real-time audits and reserve tracking, elevating their appeal for institutional use.
Also Read: Ripple’s RLUSD Stablecoin : What Sets It Apart from USDT and USDC?
Why RLUSD Is Bank-Grade, but the Blockchains Are Not
While RLUSD meets U.S. banking law standards, the blockchains themselves are not yet recognized as banking grade. Van Code explained that achieving this classification would require explicit acknowledgment from regulators like the Federal Reserve or the Bank for International Settlements (BIS). Such recognition would demand widespread adoption for core banking functions, including lending and central clearing.
That's the exact point!
— Vincent Van Code (@vincent_vancode) December 12, 2024
I believe #ETH ERC20 was used to issue #RLUSD so all exchanges can quickly onboard RLUSD.
Very few exchanges currently support XRPL tokens other than XRP.
That's my guess as to why they minted on ETH as well.
The XRPL is a purpose built blockchain…
Ripple’s Strategy: Bridging Ethereum and XRPL
Ripple’s decision to launch RLUSD on Ethereum initially demonstrates a strategic move to ensure maximum accessibility for exchanges. However, the ultimate goal is to funnel investors into the XRPL ecosystem, which offers faster and cheaper transactions. Van Code emphasized that this approach highlights Ripple’s dual commitment to regulatory compliance and innovation, potentially setting the stage for further growth in the blockchain sector.
The NYDFS approval of RLUSD is more than just a win for Ripple—it’s a testament to the growing maturity of blockchain technology and its increasing integration with traditional financial systems.
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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