Ripple, the cross-border payments company, is poised to enter the regulated US cryptocurrency market with its own stablecoin, RLUSD. Sources close to the matter tell FOX Business that the New York Department of Financial Services (NYDFS) is expected to grant approval in the coming days, paving the way for a December 4th launch.
This approval would grant Ripple a Limited Purpose Trust Charter, allowing it to offer RLUSD to the public in New York. This move positions Ripple as a significant player in both the New York regulated digital finance market and the broader stablecoin ecosystem, putting it in direct competition with established issuers like Circle, Paxos, and Gemini.
Ripple’s core business revolves around RippleNet, a blockchain-based global payment network designed to offer faster and cheaper cross-border transactions. While its native token, XRP, serves as a bridge currency within this network, its future remains uncertain due to ongoing litigation with the Securities and Exchange Commission (SEC). The SEC alleges that XRP is an unregistered security.
The case, currently in the appeals phase, has significantly impacted XRP’s price, contributing to volatility and keeping it largely below $1 for nearly four years. However, XRP experienced a surge following Donald Trump’s presidential victory, fueled by hopes that his crypto-friendly stance will lead to more favorable regulation. Currently, XRP trades at $1.70, making it the fifth-largest cryptocurrency by market capitalization.
By introducing a regulated stablecoin, Ripple offers a less volatile alternative to XRP for users seeking the benefits of digital currencies without the regulatory uncertainty. This strategic move allows Ripple to diversify its offerings and expand its reach within the digital finance landscape.
The NYDFS is known for its rigorous regulatory approach to cryptocurrencies. Obtaining a limited purpose trust charter signifies that Ripple has met stringent requirements, including compliance with anti-money laundering and consumer protection regulations. This charter allows companies to offer specific digital asset services without being subject to the full regulatory burden of traditional banks. Paxos and Gemini, for instance, operate under similar trust charters, offering their respective stablecoins, PAX and GUSD, to New York residents and businesses.
