Fintech firm Ripple today announced that it had started testing its new stablecoin on its own blockchain and Ethereum.
The San Francisco-based company said Friday that Ripple USD (RLUSD) would help meet worldwide demand for stablecoins and be used for cross-border payments. But its testing is only the first step.
“RLUSD has not yet received regulatory approval and therefore is not available for purchase or trading—please be cautious of scammers who claim they have or can distribute Ripple USD,” the company warned on Twitter.
Ripple added that while RLUSD is being tested on its native blockchain, XRP Ledger, and the second biggest crypto network, there are plans to run the asset on others.
The company said there are “plans to expand to additional blockchains and decentralized finance (DeFi) protocols over time,” referring to the experimental crypto sphere that aims to replace traditional financial institutions.
Ripple announced back in April that it was launching a stablecoin. The asset, the company said at the time, would be fully backed by U.S. dollars, short-term U.S. government treasuries, and “other cash equivalents.”
Stablecoins are digital tokens pegged to something stable—in Ripple’s case, the U.S. dollar. Such cryptocurrencies allow crypto users to keep assets on a blockchain without fluctuations in price that affect other virtual coins, like Bitcoin.
They make up a huge share of the market, too: stablecoins are the backbone of the crypto sphere and allow traders to quickly enter and exit trades in the digital asset economy without using traditional banks or brokerages. Tether (USDT), for example, is the most-traded cryptocurrency, with a 24-hour volume of $53.3 billion, according to CoinGecko data.
Ripple is a fintech firm that wants to make payments quicker and cheaper. Its founders created XRP, the seventh-biggest digital coin by market cap.
On Wednesday, Ripple claimed victory against the Securities and Exchange Commission in a long-running lawsuit. The Wall Street watchdog had in 2020 sued the firm for allegedly selling unregistered securities in the form of XRP.
A judge ruled this week that Ripple had indeed broken securities laws, but ordered It to pay only $125 million in fines—far less than the $2 billion fine the SEC had asked for.
Edited by Ryan Ozawa.
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