Ripple RLUSD investors warned against FOMO as stablecoin trades well above peg pre-launch News โธ US โธ XRP โธ Stablecoins
Ripple RLUSD investors warned against FOMO as stablecoin trades well above peg pre-launch
Ripple CTO Schwartz warned that the RLUSD stablecoin is "not an opportunity to get rich."
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Updated: Dec. 16, 2024 at 11:02 am UTC
MoneyConf / CC BY 2.0 / Flickr. Remixed by CryptoSlate
Ripple CTO David Schwartz has urged potential investors to avoid panic-driven purchases of the Ripple USD (RLUSD) stablecoin before its official launch.
In a Dec. 15 post on X (formerly Twitter), Schwartz warned of a possible initial supply shortage, which could cause price fluctuations for the dollar-pegged asset.
This caution comes as pre-launch offers for RLUSD have reportedly reached as high as 511 XRP, equivalent to $1,200. He noted that early buyers might pay inflated prices simply for the novelty of owning the first RLUSD tokens.
The CTO explained that some buyers might pay a premium for the perceived “honor” of securing the earliest trades on Ripple’s decentralized exchange. Despite the hype, Schwartz reassured investors that the stablecoin’s price would remain near $1, as expected from any well-functioning stable asset.
Schwartz stated:
“If you want to spend a lot of money to get a tiny bit of RLUSD before anyone else does, you can. But please don’t expect the price to stay over $1 once things stabilize, which I expect they will do very quickly.”
Schwartz also emphasized that those paying excessive prices should not anticipate long-term gains. A stablecoin’s primary function is maintaining parity with its fiat counterpart, such as the US dollar. He advised against fear-driven purchases, stressing that RLUSD is not designed as a speculative asset.
He added:
“Please don’t FOMO into a stablecoin! This is not an opportunity to get rich.”
Ripple intends for RLUSD to complement its XRP token by enhancing institutional transactions and cross-border payments. However, with the stablecoin market already crowded with giants like Tether’s USDT and Circle’s USDC, RLUSD would face tough competition upon its debut.
Last week, the New York State Department of Financial Services (NYDFS)ย approvedย the digital asset after unexpected delays in the application process. Ripple CEO Brad Garlinghouse has since confirmed that the stablecoin is on track for release at an undisclosed date.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Theย XRP Ledgerย is a decentralized cryptographic ledger powered by a network of peer-to-peer servers.
Tether
$0.99950
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
USD Coin
$0.99999
USD Coin (USDC) is a stablecoin fully backed by the US dollar and developed by the CENTRE consortium.
Ripple
Ripple is a US-based technology company which develops the Ripple payment protocol and exchange network using XRP, the digital asset native to the XRP Ledger.
Tether Limited
Tether Limited is the company that introduced Tether (USDโฎ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
Circle
Circle Internet Financial Ltd is a global internet finance company, built on blockchain technology and powered by crypto assets.
Brad Garlinghouse stands at the forefront of financial technology as the CEO of Ripple.
David Schwartz holds the pivotal role of Chief Technology Officer at Ripple, where he has been instrumental in shaping the technological framework of the company.