Ripple's CTO Suggests Upcoming Stablecoin Might Not Be Available to Retail Directly

Ripple, the company behind XRP, is on the cusp of unveiling its highly anticipated US dollar-pegged stablecoin, RLUSD.

Key Takeaways

Ripple, the company behind XRP, is nearing the launch of its much-anticipated US dollar-pegged stablecoin, RLUSD.

Excitement is brewing both within the Ripple community and the broader cryptocurrency sphere, with many anticipating RLUSD’s potential to rival established players like Tether’s USDT and Circle’s USDC.

However, recent comments from Ripple's chief technology officer, David Schwartz, suggest that the new stablecoin may not be as widely accessible as some had hoped.

Ripple's Stablecoin Might Not Be Available to Retail Directly

Ripple's CTO, responding to a comment on XRPL , hinted that the company's upcoming stablecoin might not be available directly to retail users.

Schwartz indicated that the stablecoin would likely be accessible only to institutions, following the model employed by the current market leaders, USDC and USDT.

As a result, retail users will probably have to rely on crypto exchanges and other intermediates to acquire RLUSD.

This approach, while intended to mitigate money laundering risks, may disappoint individual investors who had anticipated a more direct route to acquiring RLUSD.

“It will probably only ever be available directly to institutions,” Ripple’s CTO wrote in his response to the XRPCentral post.

The decision to cater primarily to institutional clients sparked mixed reactions within the crypto community.

Shwartz’s comments took aback some retail users who hoped to use RLUSD in their day-to-day crypto trading. However, a few others lauded the decision, suggesting Ripple is setting new standards by solely focusing on retail players.

Stablecoin Issues Work With Institutions

Behind the scenes of the stablecoin market is a complex web of relationships between issuers, institutions, and retail investors.

Usually, stablecoin issuers like Tether and Circle cater directly to institutional players, such as banks, hedge funds, and other financial institutions. These institutions, in turn, purchase large quantities of the stablecoin and then make it available to retail users through their platforms.

For example, Tether replenishes its USDT supply on exchanges like Binance and blockchains like Tron through bulk transactions, a common practice among stablecoin issuers. This process enables retail users to access stablecoins through these institutional channels, albeit indirectly.

It appears that Ripple's upcoming stablecoin could follow a similar model, with the company potentially limiting direct access to institutional players.

Ripple Stablecoin Weeks Away From Launch

Ripple's CEO, Brad Garlinghouse, recently announced that the company's stablecoin is only weeks away from launch.

The news came five months after Ripple first revealed its plans to enter the stablecoin market in April.

Garlinghouse shared that the stablecoin is currently in its final beta testing phase, with trials being conducted on both the Ripple and Ethereum blockchains.

Ripple's entry into the stablecoin market aims to support the payment ecosystem of its XRP ledger. Additionally, the company is looking to carve out a share of the growing stablecoin market, which is currently dominated by Tether, the largest stablecoin issuer with over 70% market share.

In related news, Ripple also announced a major tech revamp for XRPL.

The upgrade will integrate smart contracts and an Ethereum virtual machine sidechain, enabling the company to explore decentralized finance (DeFi) and other decentralized solutions.

Prashant Jha

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