Ripple USD (RLUSD) is gaining traction, with over $100 million minted since April 1, marking a surge in demand for the stablecoin.
This week saw two significant issuances: $50 million on Tuesday and another $50 million late Wednesday. Ripple integrated RLUSD into its payments product, with BKK Forex and iSend already utilizing it.
Industry experts anticipate that RLUSD may alter crypto market dynamics, potentially challenging established stablecoins like Tether (USDT) and USD Coin (USDC).
XRP Ledger-based decentralized financial (DeFi) applications are expected to drive XRP token demand as RLUSD gains adoption across platforms.
RLUSD, offered on both the XRP Ledger and Ethereum, maintains a 1:1 peg to the U.S. dollar, backed by U.S. dollar deposits, short-term U.S. Treasuries, and cash equivalents.
The stablecoin operates a 1:1 reserve system where each token mirrors an equivalent fiat value.
Users can mint RLUSD by depositing dollars with authorized partners, who issue tokens, or burn RLUSD to redeem cash. Market arbitrage helps stabilize its price: if RLUSD trades below $1, traders buy it to redeem at par, raising demand; if above $1, they mint more, increasing supply.
RLUSD incorporates security features for institutional appeal. In January, an XRP Ledger amendment introduced a “clawback” feature, enabling the issuer to reclaim tokens from users’ wallets under specific conditions such as regulatory compliance, fraud, illegal activities, or tokens sent to unintended addresses.