Ripple CEO Brad Garlinghouse has announced that the firm has received approval from the New York State Department of Financial Services (NYDFS) to launch its Ripple USD (RLUSD) stablecoin. This exciting development was shared by Garlinghouse in a recent social media post on December 11, where he mentioned that the token will be going live in the near future.
Originally, the NYDFS was expected to approve the stablecoin on December 4, but due to unforeseen circumstances, the launch was delayed. Despite this setback, Ripple remains dedicated to introducing the stablecoin under the supervision of the regulator. It is important to note that in New York, crypto firms offering services to state residents are required to obtain a BitLicense or a limited-purpose trust company charter from the NYDFS.
The stablecoin market has seen significant growth, reaching an all-time high of $193.6 billion on December 8, and currently standing at $192.8 billion. The market is largely dominated by Tether USD (USDT), with a market cap of nearly $141 billion. With such intense competition in the stablecoin market, entering and establishing a presence becomes increasingly challenging.
For instance, PayPal’s stablecoin PYUSD experienced a notable decline of approximately 50% in market cap from late August to the present. On the other hand, Ethena’s stablecoin USDe has made significant strides in recent weeks, boasting a market size exceeding $5.6 billion, driven by incentive programs. Interestingly, this surpasses the combined market cap of Sky’s (formerly MakerDAO) stablecoins.
PYUSD achieved a market cap of over $1 billion during its incentive program on the Solana decentralized ecosystem, which decreased after the program concluded. In contrast, USDe currently offers an annual percentage yield of 27%. As the market becomes more competitive and investors seek greater value incentives, the success of RLUSD could hinge on its ability to offer attractive returns to users.
In conclusion, the approval of Ripple’s RLUSD stablecoin by the NYDFS marks a significant milestone for the firm. With the stablecoin market witnessing fierce competition and evolving dynamics, Ripple will need to differentiate itself and offer compelling incentives to attract users. As the market continues to evolve, the success of RLUSD will depend on its ability to adapt and meet the changing demands of investors.