Ripple’s CTO urges traders not to succumb to FOMO due to the launch of RLUSD

Due to supply shortages, the asset’s pre-market exchange rate was climbing above $1000

16.12.2024 - 09:00

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3 min

What’s new? Ripple’s CTO David Schwartz has warned investors about the potential volatility of the RLUSD stablecoin, which is getting ready to launch. In his X-account, he expressed concerns about RLUSD’s market entry, acknowledging the possibility of an initial supply shortage that could disrupt the asset’s 1:1 peg to the US dollar.

Source: X.com

What else is known? RLUSD, announced in April, will launch on Ripple’s own blockchain, XRP Ledger (XRPL), as well as on the Ethereum network. Ripple bought Standard Custody, a New York Department of Financial Services (NYDFS) regulated company to prepare for the asset launch. On December 10, Ripple CEO Brad Garlinghouse announced that the NYDFS had granted final approval for the launch of RLUSD.

Schwartz noted that some pre-market bids have seen RLUSD as high as $1244 as individual traders seek to be among the first buyers of the asset.

“There actually is someone willing to pay $1200/RLUSD for a tiny fraction of one RLUSD,” Schwartz wrote.

The senior executive expressed confidence that such inflated valuations will be short-lived, and the exchange rate will return to the $1 mark once supply stabilizes. “If it doesn’t, something is very seriously wrong,” Schwartz added.

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Schwartz reminded investors of the main goal of the stablecoin: to maintain a stable price. While there may be short-term price fluctuations during the launch, RLUSD is designed to maintain a $1 peg.