- Ripple announced the private testing of its stablecoin RLUSD on XRP Ledger and Ethereum.
- RLUSD is awaiting regulatory approval before users can purchase and trade with it.
- XRP is down over 6% following the announcement.
Ripple revealed on Friday that it has begun beta testing for its RLUSD stablecoin, pending regulatory approval for its usage. Meanwhile, XRP has declined over 6% in the past 24 hours but could see a rally after the announcement.
XRP down amid Ripple's move to launch USD stablecoin
Ripple has begun testing its US Dollar-backed Ripple USD (RLUSD) stablecoin on the XRP Ledger and Ethereum Mainnet, according to an announcement on its X handle on Friday. The fintech company plans for the stablecoin to be released to the public following approval from regulatory authorities.
The company claims that RLUSD will be fully backed by the US Dollar and pegged to its price 1:1. The asset will also be backed by short-term US Treasuries and other cash equivalents. Ripple also claims that a third-party accounting firm will audit the reserve assets and provide monthly reports.
Ripple initially announced its intention to launch a stablecoin in April. The company states that the stablecoin will help serve users by bringing high-quality assets to the XRP Ledger.
The new milestone comes days after ending a two-year regulatory brawl with the Securities & Exchange Commission (SEC), which lasted four years, dating back to December 2020. The case was finally resolved on Wednesday after a court ruled a $125 million civil penalty fee as opposed to the SEC's request for a $2 billion fine.
Meanwhile, XRP has declined 6.9% in the past 24 hours to $0.57. Many supporters claim that the stablecoin move, coupled with the end of its SEC regulatory hurdle, will prove a bullish catalyst for XRP.
On the daily charts, XRP could decline to fill the liquidity void around the $0.5 price level. A trendline connecting April 13, June 7, July 13 and August 7 could provide support for XRP to see a bounce if it approaches this level.
XRP /USDT Daily chart
The thesis is strengthened by the Relative Strength Index (RSI) line moving below the yelllow moving average line and the Stochastic Oscillator %K line crossing below the %D line.
An upward move above $0.64 will invalidate the bearish thesis.
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