Ripple RLUSD Approval Sparks XRP Rally Amid Regulatory Milestone

Ripple’s XRP token rose more than 10% following the New York Department of Financial Services (NYDFS) approval of the company’s U.S. dollar-backed RLUSD stablecoin, according to announcements made by Ripple’s CEO, Brad Garlinghouse, on December 10.

The NYDFS approval came after months of consideration. Ripple, which had been working to secure the regulator’s greenlight for the stablecoin, took several steps to facilitate the process. This included acquiring Standard Custody & Trust Company, an entity that operates under an NYDFS limited-purpose charter.

Ripple first disclosed plans for the RLUSD stablecoin in April, positioning it as a competitor to existing major stablecoins in the market. RLUSD will be pegged 1:1 with the U.S. dollar and backed by U.S. dollar deposits, short-term U.S. treasury bonds, and other cash equivalents. According to statements from Ripple executives, RLUSD’s market capitalization could potentially reach significant figures in the coming years, and the company is targeting institutional players as primary users.

The recent approval signals that RLUSD is now in full compliance with New York’s regulatory guidelines. While Ripple has not provided a specific mainnet launch date for RLUSD, company representatives indicated that the stablecoin’s debut could happen at any time. Garlinghouse stated that all official launch dates and related updates would come directly from Ripple, and he cautioned market participants to be wary of any unofficial information or tokens not endorsed by the company.

The XRP price surged on news of the RLUSD approval. Source: Brave New Coin XRP Liquid Index

Prior to the announcement, XRP had dipped below the $2 price mark, reaching an intraday low of $1.91. Following Garlinghouse’s confirmation of the NYDFS approval, XRP rebounded and surged to a daily high of $2.41.

This represented an increase of over 26% from its intraday low. XRP later saw a slight pullback to $2.34, with daily volume rising by more than 12% to $24.4 billion. Market data indicated that XRP’s market capitalization moved closer to surpassing that of the stablecoin Tether (USDT), potentially allowing XRP to reclaim its position as the third-largest cryptocurrency by market cap.

Ripple confirmed that it has collaborated with several top cryptocurrency exchanges in preparation for RLUSD’s listing. Among these are Uphold, Bitstamp, CoinMENA, Bullish, MoonPay, Bitso, and Independent Reserve. The company plans to extend RLUSD’s availability to more exchanges and market participants over time.

RLUSD underwent beta testing starting in August on the XRP Ledger and Ethereum mainnets. Ripple executives have previously suggested that the stablecoin will work in tandem with XRP to support the company’s payment solutions and cross-border transaction services. While some observers speculate that RLUSD’s mainnet launch could take place before the end of the year, Ripple has not publicly confirmed any specific timeline.