Ripple’s chief technology officer David Schwartz has warned investors about potential price volatility for Ripple’s USD-pegged stablecoin RLUSD as it prepares for the launch.
December 15 post On X, Schwartz raised concerns about the RLUSD market’s debut, acknowledging a lack of initial supply that would push its price above the projected $1 parity against the U.S. dollar.
No announcement has yet been made as to when RLUSD will be released to the market. Ripple did not immediately respond to a request for comment.
In August, Ripple announced that it had begun testing its new stablecoin On the XRP Ledger (XRPL) and Ethereum main industry. Ripple plans Using RLUSD to provide cross-border payment solutions for its global users.
Schwartz noted some pre-market bids as high as $1,244 RLUSD, which he attributed to the excitement of buyers seeking the “honor” of purchasing the first units of the stablecoin.
“There is actually someone willing to pay $1,200/RLUSD for a small fraction of one RLUSD,” Schwartz wrote, referring to the Ripple wallet listing.
However, he said that such increased prices will be short-term and assured that “after the supply stabilizes, the price will return to $1. If not, then something is seriously wrong.”
Schwartz cited market forces, noting the role of arbitrageurs in stabilizing the RLUSD price. Arbitrageurs are expected to quickly normalize the price of RLUSD by selling at higher prices and buying at $1 or below, equalizing supply and demand.
“Please don’t turn FOMO into a stablecoin! This is not a get rich opportunity,” Schwartz added.
The warning comes as Ripple prepares to release RLUSD in its wake lock up December 11 by the New York Department of Financial Services.
Schwartz concluded by reminding investors of the main goal of a stablecoin: to have a “stable price.” Although short-term price fluctuations are possible during launch, the stablecoin is designed to maintain a $1 peg.
Meanwhile, XRP went up earlier this month it hit a seven-year high of $2.74, its highest price since January 2018 – a fivefold increase in the past 30 days.
XRP decreased by almost 1% during the last day and amounted to 2.41 dollars Coingecko data.
Edited by Sebastian Sinclair
Daily information Bulletin
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