- New York’s Department of Financial Services is expected to approve Ripple’s stablecoin RLUSD, allowing Ripple to legally offer it in the regulated digital finance market.
- Ripple’s native cryptocurrency XRP has been in regulatory limbo due to an SEC lawsuit, but the incoming Trump administration could potentially drop the case, boosting XRP’s prospects.
- Ripple’s stablecoin launch will put it in direct competition with other major U.S. stablecoin issuers like Circle, Paxos, and Gemini in the growing stablecoin market.
New York’s top crypto regulator is close to approving a new stablecoin issued by cross-border payments company Ripple, according to FOX Business. The approval would allow Ripple to offer its RLUSD stablecoin in New York’s regulated digital finance market.
Ripple’s Business and Regulatory Challenges
Ripple’s core business centers around its global payments network RippleNet, which uses blockchain to enable faster cross-border payments. RippleNet aims to be an alternative to the global SWIFT bank settlement system.
Ripple’s XRP token serves as a bridge currency on RippleNet, but XRP is in regulatory limbo as the SEC argues it is an unregistered security. The SEC sued Ripple in 2020 for selling unregistered securities, causing XRP’s price to fall over 50%.
The incoming Trump administration could drop the SEC case, given its crypto-friendly stance. In the meantime, uncertainty around XRP has led to price volatility.
Potential Impact of Ripple’s Stablecoin
By having a regulated stablecoin, Ripple would offer customers an alternative to volatile XRP. The move positions Ripple to compete with other U.S. stablecoin issuers like Circle, Paxos and Gemini.
Stablecoins are pegged to assets like the U.S. dollar and are used for faster cross-border payments. The stablecoin market valuation is around $190 billion and expected to grow under Trump, who could enable federal stablecoin regulation.
New York’s Stringent Crypto Regulation
For now, New York’s Department of Financial Services (NYDFS) provides the main state-level regulation of crypto. NYDFS is known for stringent crypto regulation with high transparency, security and consumer protection requirements.
Ripple is expected to obtain a limited purpose trust charter from NYDFS for its stablecoin. Other options like BitLicenses allow crypto trading and custody. Ripple will collaborate with payment firms like Bitstamp and Moonpay for its launch.
Conclusion
The expected NYDFS approval will be a major milestone for Ripple’s expansion into regulated U.S. digital finance. While Ripple fights its court battle over XRP, having its own regulated stablecoin allows it to tap growing stablecoin demand and compete with other key U.S. players.
