XRP, the native token of the XRP Ledger (XRPL), soared 10% on Tuesday following Ripple CEO Brad Garlinghouse’s announcement that the company’s U.S. dollar-backed stablecoin, RLUSD, received regulatory approval from the New York Department of Financial Services (NYDFS). The news sent XRP outperforming broader crypto market benchmarks, marking a pivotal moment for Ripple’s ambitions in the stablecoin space.

“This just in…we have final approval from NYDFS for RLUSD! Exchange and partner listings will be live soon,” Garlinghouse shared in a post on X.

Source: X

The announcement comes as Ripple positions itself as a competitor in the $200 billion stablecoin market, currently dominated by Tether (USDT) and Circle’s USDC. The market is projected to grow exponentially in the coming years, with Ripple eyeing a slice of the action by leveraging its established expertise in global payments and institutional partnerships.

RLUSD’s Strategic Role in Ripple’s Vision

RLUSD, Ripple’s stablecoin backed by short-term U.S. government bonds, is currently in beta testing on both the XRP Ledger and Ethereum networks. According to Ripple President Monica Long, the token is designed to play a central role in the burgeoning trend of real-world asset tokenization. “We aim to be a key intermediary for bridging traditional financial assets onto blockchain rails,” Long explained in a recent interview.

The stablecoin market has become a crucial part of the crypto ecosystem, facilitating seamless global payments and enhancing liquidity. Ripple’s RLUSD intends to capitalize on these use cases, further integrating blockchain into traditional finance.

Current Market Impact and Supply Metrics

The XRP price rally erased earlier losses, with the token climbing 6.8% over 24 hours. This surge followed Garlinghouse’s statement and reflected broader optimism in the market. Data from CryptoQuant indicates that RLUSD already has a supply of $52 million, split between $41.7 million on Ethereum and $10.4 million on XRPL.

Source: BNC XRPLX

Ripple’s stablecoin plans, first unveiled in April, emphasize a heavily regulated approach, catering to institutional players looking for reliable blockchain-based payment solutions. The company envisions RLUSD as a vital part of its payments infrastructure, alongside its ongoing efforts to tokenize real-world financial instruments.

The NYDFS approval is a crucial milestone for Ripple, paving the way for the RLUSD stablecoin’s public launch and listings on exchanges. Ripple’s entry into the stablecoin sector aligns with its long-term focus on global payments and financial innovation, as the company competes in a market forecasted to reach trillions of dollars in value.