Ripple’s highly anticipated stablecoin, RLUSD, is set to go live soon following recent approval from the New York Department of Financial Services (NYDFS). The launch has generated significant excitement within the cryptocurrency community.
However, it has raised some questions, as some community members have noticed RLUSD listings with significantly high prices. Ripple’s Chief Technology Officer (CTO), David Schwartz, has issued a critical warning regarding potential price fluctuations during the early stages of its release.
As RLUSD goes live, there may be supply shortages in the very early days before the market stabilizes. There actually is someone willing to pay $1,200/RLUSD for a tiny fraction of one RLUSD. Tools will show you the highest price anyone is willing to pay, even if it's just for a… https://t.co/LOx4rGiiiJ
— David "JoelKatz" Schwartz (@JoelKatz) December 15, 2024
Stablecoins are designed to maintain a consistent value, typically pegged to a fiat currency such as the U.S. dollar. However, Schwartz cautioned that in the initial days of RLUSD’s launch, supply shortage could temporarily disrupt its price stability.
“Short-term changes in prices due to shortages of supply or demand are certainly possible, especially around launch,” he stated, emphasizing that such deviations should not last long.
$1200 for RLUSD?
Schwartz highlighted an unusual scenario where someone wanted to pay as much as $1,200 per RLUSD for a fraction of a unit. This inflated price likely reflects the excitement surrounding the launch rather than the stablecoin’s value.
“Tools will show you the highest price anyone is willing to pay, even if it’s just for a tiny bit,” Schwartz explained. He speculated that such behavior might stem from the desire to claim the symbolic honor of being the first to buy the stablecoin.
The excitement is palpable in the community, escalating with the recent creation of Trustlines for RLUSD. As a result, behavior like this is expected, but Schwartz advises caution.
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Ripple CTO Assures Community of RLUSD’s Stability
Despite this potential volatility, Schwartz reassured the community that the market would stabilize quickly once supply meets demand. “Rest assured, the price will come back to very close to $1 as soon as supply stabilizes. If it doesn’t, something is very seriously wrong,” he warned.
The CTO also discouraged speculative behavior, particularly the tendency to act on fear of missing out (FOMO). He reiterated one of the purposes of a stablecoin, which is to maintain a steady price, and that investing in RLUSD isn’t an opportunity to get rich.
RLUSD’s approval from the NYDFS marks a significant milestone for Ripple, as the company aims to establish a compliant and reliable stablecoin that can serve a wide range of use cases, from payments to remittances. However, investors must be cautious so they don’t overpay and lose money on RLUSD.
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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