Currently, Ripple has been doing well in the crypto space especially when it launched RLUSD stablecoin in its private beta phase. At 21:38 PM UTC on October 10, 2023, Ripple launched 185 RLUSD on both Ethereum and the XRP Ledger (XRPL) and received much attention in the crypto space. This is the first official release based on an ongoing beta process from Ripple as of this issuance.
The issuance sparked concern from the community where members started to raise concern on issues such as the transaction fees and the XRP to RLUSD ratio. In defence, Ripple’s spokesperson Vet pointed out that the transaction fees of RLUSD are very marginal. He emphasised that the main value that people should derive from RLUSD is not based on the speculation on the price of the asset but in growing the XRPL infrastructure.
Scepticism emerged from certain individuals who doubted the legitimacy of the issuance arguing that anyone could have made that transaction. However, analysing the on-chain data corroborated its authenticity, indicating that it originated from the known RLUSD issuer account.
Ripple’s Commitment to Network Improvement
Ripple has clarified that its enterprise partners are in charge of the private beta testing of RLUSD stablecoin on both the XRPL and Ethereum mainnet. This is a crucial phase to resolve any possible problems hence making a new stablecoin reliable and secure.
The company has confirmed that RLUSD is still in the private testing phase and cautioned the community against such statements which suggest that RLUSD stablecoin is currently available for public use.
Caution Advised Amid XRPL Developments
Given the increased interest in RLUSD, several communities around XRP, including Vet and WrathofKahneman, have reminded the public to be wary. Vet specifically said that the emergent ones can be exploited by the wrong people. He expounded on trust lines and made it clear that RLUSD stablecoin has not been fully released and therefore is not yet available for the public to use. Other commentators such as WrathofKahneman also had similar opinions where he explained that the creation of trustlines does mean that RLUSD is ready for use or that Ripple has started the official stablecoin.
Researcher Predicts XRP Surge After Tether Concerns
On-chain researcher SMQKE has recently speculated that both XRP and Ripple’s forthcoming RLUSD stablecoin could emerge as strong contenders should there be a collapse in what he refers to as the Tether bubble, a narrative that suggests over-reliance on Tether (USDT) may destabilise Bitcoin and Ethereum. Recently, in a post, SMQKE expressed concern over the stability of Bitcoin and Ethereum because their prices are pegged to Tether too much.
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The Crypto Basic has confirmed that Tether minted an astonishing $3 billion within a single week, alongside a previous $1 billion minting event on Ethereum, which raises concerns about market inflation linked to these activities.
Tether Allegedly Propagating Bitcoin Speculation
According to SMQKE, Tether’s ongoing minting practices, which he claims may not always be backed by sufficient reserves, could be fueling a speculative bubble that pushes the prices of Bitcoin and Ethereum to unsustainable levels. He predicts that the market might experience a massive dip in the near future since the investors still have not woken up to the fact that Tether has unreliable support.
This assertion is supported by findings from a 2020 working paper published by the Bank of France titled “Stablecoins: A Brave New World?” and a separate research study on blockchain technology. That is why both of the reports argue that the enhancement of Tether liquidity is followed by the growth of Bitcoin prices, and therefore, Tether’s creation may distort market value in Bitcoin.
Analysing the connection between newly created USDT and the higher Bitcoin prices, the Bank of France provided particularly insightful findings that leave no doubt about the influence of Tether’s actions on Bitcoin.
XRP Positioned as a Stable Alternative
This goes against the volatility that has been synonymous with Bitcoin, and SMQKE is convinced that XRP is better placed for a market adjustment to offer investors a more stable investment. According to him, XRP is relatively free from these speculative factors affecting Bitcoin and Ethereum, and has proved more resilient especially in these use cases for cross-border transactions and regulatory compliance.
The expected release of Ripple’s RLUSD also adds more value to XRP. Currently the company is conducting private beta testing and has already promised that RLUSD stablecoin will abide by all the existing regulations once it is released in public. While Tether has been criticized for its poor transparency and regulatory problems, RLUSD is expected to maintain high compliance standards to ensure safer experience.
According to SMQKE, as regulatory issues increase, the issuance of a compliant RLUSD stablecoin can reduce Tether’s market share since investors will shift towards a regulated and safe stablecoin.
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