Ripple, the blockchain technology company, has received regulatory approval from the New York Department of Financial Services (NYDFS) to launch its new dollar-pegged stablecoin, RLUSD. This milestone comes as XRP, Ripple's native cryptocurrency, reaches a seven-year high of $2.90.
The RLUSD stablecoin will be fully backed by fiat cash reserves and short-term U.S. Treasury bills, maintaining a 1:1 redemption ratio with U.S. dollars. The stablecoin is designed to facilitate transactions on both the XRP Ledger and its XRP-EVM sidechain.
This development arrives during a remarkable period for XRP, which recently overtook Solana to become the fourth-largest cryptocurrency by market capitalization, reaching $138 billion. The cryptocurrency now stands within striking distance of Tether's $140 billion market cap.
The price surge aligns with broader market optimism following Donald Trump's victory in the November 2024 U.S. election, which has sparked expectations of a more cryptocurrency-friendly regulatory environment.
Adding to the momentum, major asset management firm WisdomTree has filed for an XRP ETF with the SEC, joining competitors Bitwise and Canary Capital in the race to launch regulated XRP investment products.
Industry experts note that the RLUSD stablecoin could drive increased demand for XRP. According to Axelar co-founder Georgios Vlachos, the stablecoin's integration will result in more XRP being used for transaction fees, potentially reducing the overall supply through the burning mechanism.
While XRP's recent price action triggered an overbought signal with a Relative Strength Index of 95, leading to a minor pullback, market analysts maintain a positive outlook for the cryptocurrency's long-term prospects as these ecosystem developments unfold.