Ripple Labs Burns RLUSD Tokens Minted on XRP Ledger

Coinspeaker
Ripple Labs Burns RLUSD Tokens Minted on XRP Ledger

San Francisco-based blockchain and cryptocurrency payment firm Ripple Labs has started burning its new stablecoin RLUSD. Per data from XRPScan, the platform has burned 185 of the United States dollar-pegged tokens at the RLUSD Treasury. Ripple achieved this by sending the tokens to the issuer account. 

Recall that the private beta version of the stablecoin went live on XRP Ledger and Ethereum at the beginning of August. However, with this latest burn, no RLUSD tokens are circulated on either of the two protocols. 

After a federal judge asked Ripple to pay a civil penalty of $125 million for violating securities laws with XRP sales to institutional investors, the firm began testing RLUSD’s private beta on XRPL and Ethereum’s mainnet. 

The purpose of this phase was to test the stability, security, and efficiency of RLUSD before it becomes widely available, pending regulatory approval.

Minting of the USD-backed stablecoin on the XRPL and Ethereum mainnet commenced a few days ago. There were 185 RLUSD tokens minted on XRPL and 200 on Ethereum. This was before the burn mechanism began. Currently,  there are no RLUSD tokens available to trade on exchanges. Ripple is still working on the stablecoin and plans to make it available to the public very soon. 

The blockchain payment firm’s current focus is on ensuring that RLUSD launches successfully and without problems. 

Ripple’s foray into the stablecoin sector is a clear indication that the company is unperturbed by the niche’s saturation. Tether and Circle significantly dominate the stablecoin market, with the former leading at a safe distance. With Tether’s fast growth, the company revealed its plan to increase its workforce by next year. 

Paolo Ardoino, the company’s CEO, highlighted the careful approach to hiring, focusing on bringing in senior, experienced professionals who can contribute to the company’s growth without bloating the organizational structure. Apart from this potential increase in headcount, Tether has made many giant strides in the crypto ecosystem. 

At press time, Tether’s USDT boasts a market cap of more than $118 billion, while Circle’s USDC has a valuation of $34.5 billion. This obviously demonstrates that Tether is the dominant player in the stablecoin market. It remains unclear what the 1 year market cap projection for RLUSD will turn out to be, however, market leaders are optimistic. According to experts, RLUSD could contend for a share of this market cap when it launches later this year. 

Ripple is quite positive about its new endeavor, especially after the projection that the market will reach as high as $2.8 trillion in another four years. The payments company has no plans to replace XRP, its associated coin, with RLUSD. Some Ripple executives have clarified that they are two independent crypto assets with complementary functions.

Ripple Labs Burns RLUSD Tokens Minted on XRP Ledger