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XRP News: Ripple CTO Warns of Early RLUSD Supply Shortages and Price Volatility
Ripple’s Chief Technology Officer, David Schwartz, has issued a warning to investors regarding the upcoming launch of RLUSD, a new stablecoin. In a recent statement, he cautioned that early supply shortages could lead to price volatility in the market.
According to Schwartz, temporary supply shortages may arise when RLUSD initially goes live, resulting in prices briefly spiking above $1 per unit. He emphasized that this is an ordinary phenomenon and urged investors not to fall prey to “FOMO” (Fear of Missing Out) over short-term fluctuations.
Schwartz clarified that these price spikes are temporary and will be quickly corrected by arbitrage traders as the market stabilizes. His primary concern is ensuring that the stablecoin’s core purpose – maintaining a stable price – is not compromised by short-term manipulations.
The RLUSD stablecoin is designed to be tied to the US dollar, thereby maintaining a fixed value of $1. It will operate on both the XRP Ledger and Ethereum blockchains, with Ripple assuring that it will be fully backed by cash and equivalent reserves, allowing for seamless redemption at 1:1 ratio.
The community is eagerly awaiting the RLUSD launch, which promises to revolutionize the cryptocurrency landscape by providing a reliable store of value.
Source: coinpedia.org
