Ripple’s Chief Technology Officer, David Schwartz, has issued a warning to investors regarding potential supply constraints and price fluctuations for the company’s upcoming USD-pegged stablecoin, RLUSD.

Possible Price Swings and Supply Shortages

Schwartz confirmed that once supply and demand return to normal, the price of the stablecoin would settle close to its planned $1 parity, despite anticipated price swings. As RLUSD goes live, there may be supply shortages in the early days before the market stabilizes.

Schwartz explained that some bidding tools may show high prices, such as $1,200/RLUSD, but these prices are likely a result of people seeking to hold the first RLUSD tokens, rather than reflecting actual market worth.

Pre-Launch Offers and Market Value

Some pre-launch offers have raised concerns, with one bid on a Ripple wallet called Xaman pricing a portion of RLUSD at 511 XRP, which is more than $1,200. Schwartz clarified that such high bids probably reflect people looking for the novelty of holding the first RLUSD tokens, rather than the actual market value.

Upcoming Launch and Regulatory Approval

The stablecoin is anticipated to launch shortly after receiving final regulatory permission from the New York Department of Financial Services. Ripple CEO Brad Garlinghouse announced that the company has received final approval for RLUSD.

This just in…we have final approval from @NYDFS for $RLUSD! Exchange and partner listings will be live soon – and reminder: when RLUSD is live, you’ll hear it from @Ripple first.

Ripple’s Goals and Expectations

Ripple views RLUSD as an addition to XRP, increasing its usefulness while making use of XRP’s extensive exchange availability to keep RLUSD’s price stable. Executives at Ripple have reaffirmed that the company’s main goal would be to support institutional participants, with beta testing showing promise for preventing depegging and enhancing worldwide liquidity.

Tips for Investors

When investing in RLUSD, keep the following points in mind:

  • Be aware of potential supply constraints and price fluctuations in the early days of the stablecoin’s launch.
  • Understand that high bids may not reflect actual market value, but rather people seeking to hold the first RLUSD tokens.
  • Ripple’s main goal is to support institutional participants, which may impact the stablecoin’s price and availability.

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