RLUSD has the potential to impact the XRP price, drawing parallels with past stablecoin launches on other networks like TRON.
Ripple has announced the start of its USD-pegged RLUSD stablecoin minting on both the Ethereum mainnet and the XRP ledger. So far, the blockchain firm has produced 385 RLUSD on the aforementioned networks.
Ripple Mints RLUSD Stablecoin On XRPL & Ethereum Mainnet
We anticipate that this action will significantly impact the price of XRP and the growth of the Ripple market. Ripple issued 185 RLUSD tokens on the XRP Ledger on August 22. Consequently, it generated an additional 200 RLUSD on the Ethereum network today.
Despite the fact that these initial minting activities are comparatively modest, Ripple’s decision is more about conducting a feasibility study than launching itself headfirst. We intend to fully back the RLUSD stablecoin with U.S. dollar deposits, short-term U.S. government treasuries, and other cash equivalents, pegged 1:1 to the USD.
Additionally, the blockchain company has guaranteed the community that these reserve assets will undergo an audit by an independent accounting firm. Additionally, it will furnish monthly attestations to guarantee transparency.
The stablecoin is still in the testing phase and has not yet obtained regulatory approval, despite the buzz surrounding RLUSD. Ripple has been transparent about this fact. This has led the organization to issue a warning to users regarding potential schemes that purport to grant early access to RLUSD.
Additionally, the RLUSD stablecoin’s introduction coincides with Ripple’s most recent legal disputes with the U.S. Securities and Exchange Commission (SEC). Judge Torres assessed a $125 million sanction against Ripple for violating securities laws in 1,278 institutional sales transactions.
Impact Of RLUSD Launch On XRP Price
Ripple has continued to press forward with its ambitious plans, as evidenced by the most recent stablecoin launch, despite this legal concern. Ripple’s RLUSD stablecoin has the potential to substantially increase the price of XRP.
For context, the introduction of a stablecoin results in substantial liquidity for a blockchain network. Historical precedents substantiate this perspective. The price of Ethereum increased significantly after MakerDao’s DAI stablecoin was added to the Ethereum network.
In the same vein, the price of Tron experienced a substantial increase when Tether commenced minting on the TRON network. Therefore, there is optimism that the introduction of RLUSD could result in a comparable trajectory.
Additionally, “WrathofKahneman” on X, a proponent of XRP, emphasized a post that compared the percentage of value resolved in stablecoins on Ethereum to the ETH price over time.
He noted that the comparison is not a precise match due to the differences in gas fees and smart contracts, but it is significant that the price of ETH increased in tandem with the increase in stablecoin usage.
He expressed enthusiasm and optimism about RLUSD’s potential influence on the XRP Ledger. RLUSD’s ongoing beta phase is essential for the evaluation of the stablecoin’s efficacy, security, and stability.
Nevertheless, the broader implications of this launch extend beyond the technical aspects. According to an XRP Ledger validator, Ripple’s entrance into the stablecoin market could have substantial secondary effects on the Automated Market Maker (AMM) total value locked (TVL) of the XRP Ledger.
They also emphasized the significance of Ethereum’s utilization of the token.The XRP price is presently in a tight range, forming a pennant that suggests a volatile breakout could be on the horizon from a technical perspective.
The most recent analysis has identified two potential scenarios; Typically, a price correction follows a bearish breakthrough. A favorable breakout has the potential to result in a substantial increase.
We anticipate the introduction of the RLUSD stablecoin to influence the market’s trajectory in either scenario. A 4.5% price correction could result from a breach below the pennant’s lower trend line, given the uncertainty surrounding the SEC’s appeal of Judge Torres’ decision.
Consequently, the XRP price may attempt to challenge support levels between $0.568 and $0.573. If the price recovers, this could present an accumulation opportunity. However, a breakout above the pennant’s upper trend line and resistance at $0.626 could trigger a 9% price increase with a target of $0.643 to $0.657.
