Ripple CTO Warns Against Panic Purchases of RLUSD Stablecoin
Ripple CTO David Schwartz has advised potential investors to exercise caution when considering purchasing the Ripple USD (RLUSD) stablecoin before its official launch. In a recent post on X (formerly Twitter), Schwartz highlighted the possibility of an initial supply shortage leading to price fluctuations for the dollar-pegged asset.
Reasons for Caution
- Early offers for RLUSD have reached as high as 511 XRP, equivalent to $1,200.
- Some buyers may pay inflated prices for the novelty of owning the first RLUSD tokens.
- Perceived “honor” of securing early trades on Ripple’s decentralized exchange driving premium prices.
Schwartz reassured investors that despite the hype, the stablecoin’s price is expected to remain near $1, as is typical for a well-functioning stable asset. He cautioned against fear-driven purchases and emphasized that RLUSD is not intended as a speculative investment.
Stablecoin Functionality
- Stablecoins like RLUSD aim to maintain parity with fiat currencies such as the US dollar.
- Long-term gains from excessive purchases are unlikely.
- Stablecoins serve to enhance institutional transactions and cross-border payments.
Ripple’s entry into the stablecoin market, already populated by giants like Tether’s USDT and Circle’s USDC, will face significant competition. The approval of RLUSD by the New York State Department of Financial Services signals progress after unexpected delays in the application process.
Conclusion
Ripple CEO Brad Garlinghouse has confirmed that RLUSD is on track for release, positioning it to complement the XRP token in the cryptocurrency ecosystem. Investors are urged to exercise diligence and avoid panic-driven decisions when considering stablecoin investments.
