Will Ripple’s RLUSD Stablecoin Succeed Where AUDD Failed?

Ripple’s announcement of their RLUSD stablecoin has sparked debate within the crypto community, especially because of the challenges faced by Novatti Payments’ AUDD stablecoin. AUDD was supposed to be listed on both the XRP Ledger (XRPL) and Stellar, but it faced liquidity challenges on XRPL, leading many to wonder if RLUSD will encounter a similar fate.

I remember when Novatti Payments wanted to list AUDD on the XRPL and Stellar and it was eventually listed on Ethereum, Stellar and the XRPL. It ended up having no liquidity on the XRPL. Why will RLUSD be different.? I am not sure? https://t.co/uFFJ2wlAmG pic.twitter.com/GO0tezSVrd

— bill morgan (@Belisarius2020) September 30, 2024

One of the key issues with AUDD on XRPL was the lack of liquidity, caused by the absence of active integrations from market-making (MM) partners. According to statements from Novatti Payments, their MM partners could not maintain liquidity on XRP’s decentralized exchange (DEX).

This meant buyers and sellers were not consistently matched on the DEX, creating a stagnant trading environment for AUDD on XRPL. Buyers had to use other platforms like LocalCoinSwap or Stellar DEX to acquire AUDD, further compounding the liquidity issues on XRPL.

Ripple’s RLUSD and Blockchain Strategy

If Ripple were to launch RLUSD on XRPL, it may face similar challenges. Jungle Inc Crypto News expressed doubts about RLUSD’s future on XRPL, suggesting it might debut on Ethereum instead.

Read also: Ripple’s RLUSD Stablecoin: Will it Face SEC Scrutiny?

Ripple’s RLUSD stablecoin will lack key capabilities on the XRPL—if it even launches there at all.

Reports suggest it could start on Ethereum. Despite having time for parties, Swell events, Apex conferences, sidechain development, and even examining smart contracts for XRPL,… pic.twitter.com/Ex5EJpdHmk

— Jungle Inc Crypto News (@jungleincxrp) September 30, 2024

Ripple’s focus on sidechain development, smart contracts, and blockchain events like Swell has raised questions about their commitment to ensuring the XRPL is fully prepared for RLUSD’s launch. If liquidity challenges persist, RLUSD might struggle on XRPL as AUDD did.

Ripple’s Business Priorities and XRP’s Role

The uncertainty surrounding RLUSD’s future on XRPL has prompted broader questions about Ripple’s overall strategy, particularly regarding their XRP holdings. While Ripple has long touted XRPL’s decentralized nature, critics question their reliance on XRP sales for revenue.

Industry observers say Ripple’s primary revenue is still XRP sales, with little indication that they have successfully diversified their income through other business ventures, despite their involvement in CBDC development and partnerships with governments.

Some within the XRP community believe that Ripple’s interest in Ethereum may be temporary and driven by short-term revenue goals. They believe that Ripple’s XRP holdings, valued at around $24 billion, give them a beneficial interest in maintaining and growing XRPL’s ecosystem.

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