Can XRP extend its recovery after Ripple-BlackRock partnership?

Key Takeaways

How will Ripple help BlackRock? 

Fund holders of BlackRock’s BUIDL can redeem the shares to RLUSD for fast and efficient on-chain liquidity. 

How will it benefit XRP? 

The update did not stir XRP as the altcoin under the whims of the broader market sentiment. 

Ripple [XRP] has announced off-ramp support for BlackRock’s tokenized money market fund, BUIDL, allowing fund holders to swap 1:1 with its stablecoin RLUSD. 

A similar feature will be enabled for VanEck’s tokenized product, VBILL, in the coming days. According to Ripple CEO Brad Garlinghouse, the move was a ‘real utility’ for users to have on-chain liquidity on the go. 

He added that the swap feature will be available on Ethereum [ETH] but will be expanded into the XRPL ecosystem. 

Source: X

Market reactions

The off-ramping will be achieved through a partnership with Securitize, the real-world asset tokenization powering the VBILL and BUILD products. 

Conventionally, the off-ramping for these two tokenized treasury funds involves off-chain through bank transfers or equivalent cash via Securitize.

This could take more time for settlement, hence the on-chain exit like RLUSD can be more efficient. 

But RLUSD isn’t the first one to offer this feature. Circle made the first move in April 2024, allowing BlackRock’s BUIDL fund holders to cash out via USDC.

As of writing, RLUSD had a market cap of $742 million, with an 8% growth in the past month. Circle’s USDC, on the other hand, had a $73.6B market size and ranked second only to Tether’s USDT. 

Source: DeFiLlama

Some notable rival stablecoins that posted double-digit growth over the same period were Ethena’s [ENA] USDe and PayPal’s PYUSD. 

For Ethena, its high yield has been a key selling point, while PYUSD has scored several partnerships on top of its 4% yield rate. 

However, RLUSD was launched last December, so the current pace of growth was commendable too. In fact, its aggressive expansion towards institutional clients could fuel its growth. 

For Jack McDonald, SVP of stablecoins at Ripple, the latest partnership will be a ‘natural step’ to bridge traditional finance and crypto.

For his part, Carlos Domingo, CEO of Securitize, said the integration will help ‘automate liquidity for tokenized assets.’

That said, XRP, like the rest of the market, was barely holding itself together after the recent liquidation cascade.

It was down about 10% from its September high of $3.2 but defended the H2 support at $2.7, raising recovery hopes.  But price action formed a bearish descending triangle pattern, which could drag it lower if validated. 

Source: XRP/USDT, TradingView