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Ripple’s $RLUSD stablecoin launch sparks a warning against “FOMO,” as early supply shortages could cause temporary price spikes before stabilizing near $1.
$RLUSD Launch Warning: Why Ripple CTO Urges Caution Amid Initial Supply Issues
Ripple’s chief technology officer, David Schwartz, has issued a measured warning about early price volatility for the company’s U.S. dollar-backed stablecoin, $RLUSD, as it prepares for launch. Posting on social media platform X on Sunday, Schwartz explained that early adopters might encounter unusual prices due to supply shortages. He shared:
As $RLUSD goes live, there may be supply shortages in the very early days before the market stabilizes. There actually is someone willing to pay $1,200/$RLUSD for a tiny fraction of one $RLUSD.
However, Schwartz emphasized that this volatility would not last. “But rest assured, the price will come back to very close to $1 as soon as supply stabilizes. If it doesn’t, something is very seriously wrong.”
Ripple is set to launch $RLUSD on Dec. 17. The stablecoin will initially be available on platforms including Uphold, Bitso, Moonpay, Archax, and Coinmena, with plans to expand to exchanges such as Bullish, Bitstamp, Mercado Bitcoin, Independent Reserve, and Zero Hash in the near future. Each $RLUSD token is fully backed by U.S. dollar deposits, U.S. government bonds, and cash equivalents, ensuring its stability. Transparency will be upheld through monthly third-party attestations conducted by an independent auditing firm.
Additionally, Ripple has enlisted former central bankers Raghuram Rajan and Kenneth Montgomery for its advisory board to provide strategic guidance on financial and regulatory matters. The launch is expected to enhance liquidity within the $XRP ecosystem, potentially leading to a price rally for $XRP.
Addressing speculative activity, Schwartz urged caution for those hoping to profit from $RLUSD during its launch phase. “If you want to spend a lot of money to get a tiny bit of $RLUSD before anyone else does, you can. But please don’t expect the price to stay over $1 once things stabilize, which I expect they will do very quickly,” he said. He reiterated the stablecoin’s fundamental purpose, advising users to temper their expectations. He cautioned against acting on fear of missing out (FOMO), stating:
Please don’t FOMO into a stablecoin! This is not an opportunity to get rich.
Schwartz explained that any temporary price fluctuations caused by supply and demand imbalances should correct quickly as market mechanisms take over.