The XRP army is excited about the upcoming launch of Ripple’s stablecoin, RLUSD, as the consensus is that the stablecoin will help XRP grow.
However, many in the community don’t understand how this will happen. Brett (@Brett_Crypto_X), a crypto expert on X, recently weighed in on this, explaining how XRP can grow with RLUSD in the market.
RLUSD and XRP Integration
Traditionally, cross-border payments are hampered by inefficiencies, requiring banks to hold reserves in foreign currencies or rely on correspondent banking systems. These systems are not only slow but also incur high transaction costs. RLUSD can solve this with a unique approach.
Here’s how it works: A bank in one country converts its fiat currency to RLUSD. To perform the transaction, RLUSD is then converted to XRP, Ripple’s highly liquid intermediary asset, for near-instant global transfers.
On reaching the recipient’s country, XRP is converted back into RLUSD or local fiat. This seamless integration eliminates the need for pre-funded nostro accounts, reduces transaction costs, and accelerates settlement times.
Implications for XRP
The adoption of RLUSD could lead to increased XRP utilization. As a stablecoin, RLUSD provides a secure, non-volatile asset to bridge fiat-to-crypto transactions. By leveraging XRP as the intermediary settlement layer, the demand for XRP liquidity rises.
There have been many bullish predictions for XRP as a bridge, as increased demand for any asset often drives a price increase. However, there’s more in store for the digital asset.
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As one community member pointed out, increased usage of the XRP Ledger and RLUSD will burn XRP, as it is used for transaction fees on the network. This will slowly reduce XRP’s supply, potentially boosting its price as scarcity sets in.
Shiba Inu is a prominent cryptocurrency that works in a deflationary model. The Shiba Inu community continually burns SHIB tokens to contribute to this deflationary model and increase the digital asset’s price.
Finally, as RLUSD adoption grows, Ripple’s ecosystem becomes increasingly attractive to financial institutions as an alternative to SWIFT or similar traditional systems. This boosts overall XRP market activity, further enhancing its liquidity and utility.
When Will Ripple Launch RLUSD?
Ripple CEO Brad Garlinghouse announced the imminent launch of RLUSD in September, but the company has not launched this new digital asset because of regulatory hurdles.
There was speculation that the company would launch the stablecoin on December 5. The company has confirmed that it is still working with regulators and awaiting final approval from the New York State Department of Financial Services (NYDFS).
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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