Ripple Lab’s new stablecoin Ripple USD (RLUSD) is set to receive approval from the New York Department of Financial Services (NYDFS) and may be ready for launch by Dec. 4, Fox Business reported citing people familiar with the matter.
Once Ripple Labs receives the approval, it will be able to legally offer RLUSD—an overcollateralized dollar-pegged stablecoin.
The launch of RLUSD is set to come at a time when Ripple is embroiled in a battle with the U.S. Securities and Exchange Commission (SEC) to prove that XRP is not an unregistered security. While the case is currently in the appeals phase in the Second Circuit, it could be dropped when SEC chair Gary Gensler steps down and Donald Trump assumes control of the White House in January.
In the meantime, Ripple’s RLUSD will become a steady alternative that is not prone to volatility like XRP.
Amid the absence of federal stablecoin regulations, operating under state-level regulation is the best approach for companies looking to offer stablecoins. Ripple can launch RLUSD either by obtaining a limited purpose trust charter like Paxos and Gemini or through the BitLicense, which allows crypto exchanges to facilitate trading and custody of crypto.
Ripple first announced its plans to launch RLUSD in April. In June, Ripple acquired Standard Custody & Trust Company, a limited purpose trust company chartered by the NYDFS. Standard Custody, which already had a license by the NYDFS to offer crypto custodial services, will become the issuer of RLUSD once the NYDFS greenlights the stablecoin.
In August, Ripple started beta testing RLUSD on the XRP Ledger and Ethereum mainnet. At the time, the company also announced plans to expand the stablecoin to other blockchains. In a statement, Ripple had stated:
“There is a clear demand for stablecoins that deliver trust, stability, and utility. Once RLUSD is available, Ripple will use both RLUSD and XRP in its cross-border payments solution to serve its global customers and dramatically improve their experience.”
In October, Ripple announced that it has partnered with top exchanges to make RLUSD available to users. This includes Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish.
Ripple intends to conduct regular, third-party audits of the reserves backing RLUSD and publish monthly reports.