Here’s Why Ripple RLUSD May Not Be Pegged To $1 After Launch

David Schwartz attributes Ripple RLUSD's pre-launch spike over $1,200 to limited supply and high demand, predicting a stable price of $1.
By Ronny Mugendi
Breaking: Ripple To Launch RLUSD On December 17

Highlights

  • Ripple's RLUSD stablecoin hit $1,200 on DEX due to early supply shortages before market stabilization.
  • Ripple CTO confirmed RLUSD price will normalize near $1 as supply and demand balance post-launch.
  • RLUSD received NYDFS approval, clearing its path for official launch in the stablecoin market.

Ripple newly introduced stablecoin, RLUSD, has generated attention with its unusual pricing, exceeding $1,200 per unit in pre-launch transactions. Ripple CTO David Schwartz has clarified that these fluctuations are attributed to limited supply and heightened demand during the early phase of the stablecoin’s release.

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David Schwartz Explains $1,200 Ripple RLUSD Price Spike

Ripple’s USD-pegged stablecoin, RLUSD, recorded an unexpected valuation of $1,200 on decentralized exchanges (DEX) before its official launch. This has been linked to supply shortages and heightened demand for the token during its pre-release phase.

David Schwartz, Ripple’s CTO, explained that the inflated valuation stems from market tools that reflect the highest price bidders are willing to pay. He emphasized that the pricing is not the actual value of RLUSD but rather a result of limited availability. 

Schwartz assured investors that once the stablecoin reaches sufficient circulation, its price would stabilize near the $1 benchmark.

Additionally, last week, the New York Department of Financial Services (NYDFS) granted regulatory clearance for Ripple’s RLUSD, positioning it for entry into the stablecoin market. This approval was a critical step for Ripple, as the company expands its portfolio with a regulated USD-pegged asset.

Testing for RLUSD has been underway since August, with developers and institutional partners refining its functionality to ensure parity with the U.S. dollar. The stablecoin’s official launch will boost its role in cross-border payments and liquidity solutions.

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Early Transactions Indicate Demand Despite Price Instability

In the days leading up to its launch, RLUSD saw limited minting, with speculative traders engaging in high-priced transactions on platforms like the Xaman XRP wallet. Reports indicate that one such transaction priced a fraction of RLUSD at 511 XRP, equivalent to over $1,200.

Schwartz noted that some users may be paying inflated amounts for the perceived novelty of holding the first batch of Ripple RLUSD. He reiterated that these prices will revert to $1 once supply meets demand.

The Ripple CTO emphasized, 

“The whole point of a stablecoin is to have a stable price. Short-term changes in prices due to shortages of supply or demand are certainly possible, especially around launch, but they shouldn’t remain for very long as arbitragers rapidly fix the market. Please don’t FOMO into a stablecoin! This is not an opportunity to get rich.”

The stablecoin will complement XRP’s utility, leveraging its established exchange presence to ensure liquidity and minimize the risk of depegging. More so, reports indicate that the XRP company minted 13.9 million RLUSD tokens across the XRP Ledger and Ethereum Network. The minting includes 2.6 million RLUSD on the XRP Ledger and 11 million RLUSD on Ethereum.

Following the imminent launch of Ripple RLUSD stablecoin, XRP has seen notable price activity, currently trading at $2.37. Over the past month, XRP price surged by 111%, driven by investor anticipation and growing market confidence.

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Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
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