Ripple has issued a cautionary note to investors and market watchers regarding the anticipated volatility of its newly approved stablecoin, RLUSD, set to launch soon. Despite securing regulatory approvals in New York, Ripple’s Chief Technology Officer, David Schwartz, warned that RLUSD could experience significant price fluctuations in the early stages of its release, urging against “fear-of-missing-out” (FOMO) behavior among investors.
Ripple’s warning comes as reports indicate unusually high pre-launch bids for RLUSD, the USD-pegged stablecoin that Ripple plans to use as a key part of its cross-border payment solutions. As the launch date approaches, there has been increasing speculation, with some bids soaring far above the coin’s intended $1:1 parity with the U.S. dollar. According to Schwartz, one such bid valued a tiny fraction of RLUSD at $1,200, well above its intended stable price.
In a post on social media platform X, Schwartz explained that these inflated bids are a result of early traders looking to secure the symbolic prestige of purchasing the first units of RLUSD. “As RLUSD goes live, there may be supply shortages in the very early days before the market stabilizes,” Schwartz stated. “In some cases, there are even bids of $1,200 per RLUSD, driven by people seeking the ‘honor’ of buying the first fraction of the coin.”
Ripple emphasized that such price discrepancies were purely temporary and would likely fade as the market stabilizes and supply meets demand. Schwartz added that while the early-stage volatility could be marked by inflated prices, the stablecoin would ultimately return to its intended value once equilibrium is reached.
“Rest assured, the price will come back to very close to $1 as soon as supply stabilizes,” Schwartz reassured the public. “If it doesn’t, something is very seriously wrong with the market dynamics.”
The stablecoin RLUSD has been designed to complement Ripple’s existing XRP token, with the goal of facilitating more efficient cross-border transactions and enhancing liquidity in global markets. After obtaining final approval from the New York Department of Financial Services (NYDFS), Ripple is now preparing for the coin’s official market launch. The company revealed that exchange listings for RLUSD will go live soon, with further partnerships on the horizon.
Ripple aims for RLUSD to be used primarily by institutional clients, leveraging its stable value to bridge traditional fiat currencies and the growing world of digital assets. Schwartz clarified that the stablecoin’s use would focus on practical applications, including facilitating international payments and supporting XRP’s broader adoption.
Despite the hype surrounding RLUSD, Schwartz strongly discouraged investors from viewing it as a speculative opportunity. He emphasized that RLUSD, like other stablecoins, is designed for stability and not for generating rapid returns. “Please don’t FOMO into a stablecoin,” Schwartz advised. “This is not an opportunity to get rich.”
The volatility Schwartz warned about reflects the speculative nature of early-stage market behavior. While RLUSD is ultimately designed to maintain a stable value, its early days could be marked by overinflated bids, especially as early adopters and institutional investors jockey for position. Ripple’s message is clear: investors should approach the stablecoin with caution, understanding that its long-term value proposition lies in its stability rather than short-term gains.
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