- Ripple CTO David Schwartz cautions against early speculative RLUSD purchases as prices may temporarily spike due to supply shortages and launch excitement.
- RLUSD’s price is expected to stabilize near its $1 peg as supply normalizes, reflecting its design as a compliant and reliable stablecoin for practical use.
Ripple is preparing to roll out its new stablecoin, RLUSD, following approval from the New York Department of Financial Services (NYDFS). While the launch has sparked enthusiasm within the crypto community, Ripple CTO David Schwartz has issued a word of caution regarding potential price volatility during its early days.
As revealed in a recent CNF update, Ripple Labs has secured a significant win with the RLUSD stablecoin. Stablecoins like RLUSD are typically pegged to the U.S. dollar, but Schwartz noted that initial supply shortages could cause temporary price swings. Quoting his statement:
The whole point of a stablecoin is to have a stable price. Short-term changes in prices due to shortages of supply or demand are certainly possible, especially around launch, but they shouldn’t remain for very long as arbitragers rapidly fix the market.
Early Price Spikes Draw Attention
Schwartz highlighted unusual listings for RLUSD, with prices reaching as high as $1,200, despite the coin’s intended $1 peg. He explained this inflated pricing might be driven by speculative excitement or symbolic bids to be the first buyer. As he noted:
Tools will show you the highest price anyone is willing to pay, even if it’s just for a tiny bit. Maybe someone wants the ‘honor’ of buying the first bit of RLUSD on the DEX.
While acknowledging the hype, Schwartz warned that such price deviations are unsustainable and urged caution against purchases fueled by fear of missing out (FOMO).
Market Stability on the Horizon
Despite potential short-term volatility, Schwartz reassured the community that RLUSD’s price would normalize near $1 once supply stabilizes. Ripple’s approval for RLUSD marks a significant step toward creating a compliant and reliable stablecoin for various applications, including payments and remittances.
Although the RLUSD launch has sparked $1,200 price offers, Ripple (XRP) is currently trading at $2.39, having retraced slightly with a 1.06% dip over the past day and 0.79% in the past week. Schwartz emphasized that RLUSD is not designed for speculative profits and advised users to avoid overpaying during its early stages.
