Coinbase lists RLUSD stablecoin, aims to challenge Kraken’s US market share

Coinbase, one of the leading cryptocurrency exchanges in the United States, has added the Ripple USD ($RLUSD) stablecoin to its offerings. The asset is now available for both retail and institutional clients on Coinbase Prime, the Exchange terminal, and the standard application. $RLUSD can be converted to US dollars at a 1:1 ratio across three different blockchain networks: $XRP Ledger, Ethereum, and Base.

Expansion of Ripple and Coinbase partnership

The integration of $RLUSD marks a significant step in fostering a direct commercial partnership between Ripple and Coinbase. On the Base blockchain, which was developed as a layer-2 scaling solution by Coinbase, Ripple itself will provide liquidity for $RLUSD, reinforcing the asset’s presence within the exchange’s ecosystem.

Ripple launched $RLUSD with an initial capitalization of $2.4 billion, specifically designed to meet the demands of corporate and institutional clients rather than compete directly with major retail stablecoins such as USDT.

Mini dictionary: Base – Base is an Ethereum layer-2 network created by Coinbase to provide faster and more cost-effective blockchain transactions, aimed at improving scalability for decentralized applications and assets.

Shifting competitive dynamics with US stablecoin listings

Until this development, Kraken was the primary exchange offering regulated $RLUSD trading against the US dollar for customers in the United States. $RLUSD’s listing on Coinbase signals a clear bid to capture a larger share of American institutional and retail demand, potentially redistributing market dominance.

Recent $RLUSD trading volumes at Kraken stood just above $225,000 daily in $RLUSD/USD and $RLUSD/USDC pairs, with the asset reliably maintaining parity with the dollar. Coinbase aims to significantly increase this figure by leveraging its broader infrastructure and user base, particularly among institutional investors.

Jack McDonald, a senior executive at Ripple, observed that there is strong institutional demand for regulated, high-quality stablecoins, noting that options on trusted platforms were previously limited. Brett Tejpaul, head of Coinbase Institutional, described the listing as progress toward an “everything exchange,” referring to Coinbase’s objective of providing a unified, secure, and compliant trading environment.

Jack McDonald indicated a clear appetite for “compliant, high-quality stablecoins” among institutions, pointing out a need for access on platforms already established within the industry. Brett Tejpaul characterized the integration as supporting Coinbase’s mission to unify security and compliance for all markets.

Regulatory milestones and future integrations

The $RLUSD listing took place in parallel with regulatory advances for Ripple. The Office of the Comptroller of the Currency (OCC) recently approved the formation of Ripple National Trust Bank, placing the new entity under federal regulatory oversight. In addition, Moody’s assigned $RLUSD investment-grade ratings of A2 and P-1, reflecting the reportedly high quality of $RLUSD’s reserves kept at BNY Mellon, a major global custodian bank.

Mini dictionary: OCC – The Office of the Comptroller of the Currency is a federal agency in the US responsible for regulating and supervising national banks to ensure safety and soundness in the banking system.

This latest collaboration concludes a turbulent chapter for both companies. Coinbase had previously delisted the $XRP token in 2020 after the US Securities and Exchange Commission took legal action against Ripple. The token’s trading only resumed on Coinbase three years later following legal developments.

Ripple’s push to scale $RLUSD in the US markets will continue with integration into Robinhood, which has 28.6 million clients, by year-end. The stablecoin is also planned for implementation in the C2FO business-to-business platform to support instant corporate settlements.