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Ripple CTO David Schwartz Explains RLUSD Stablecoin’s Major Feature
In a recent conversation, Ripple’s Chief Technology Officer (CTO) David Schwartz shed light on the major feature of Ripple’s new stablecoin, RLUSD. The discussion centered around the possibility of freezing or clawing back RLUSD tokens after they have been transferred.
Jeremy Hogan, a renowned attorney and XRP enthusiast, initially raised concerns regarding whether RLUSD or USDC could be frozen following a transfer. This question was then brought to Schwartz’s attention by an X user, seeking clarification on this matter.
Schwartz confirmed that RLUSD can indeed be frozen or clawed back. He emphasized the importance of accurately reflecting legal obligations of the issuer on the ledger. According to him, this is crucial because off-ledger events like court orders can change these obligations.
The conversation was further clarified by XRPL validator Vet, who explained that both Ethereum and XRP Ledger allow RLUSD to be frozen or clawed back in cases where law enforcement or a court order requires it. The clawback function enables Ripple, as the issuer, to retrieve tokens under specific conditions. This is vital for addressing fraud, criminal activity, or mistakenly sending tokens to an incorrect address.
Schwartz’s statement was supported by this information, highlighting that this feature serves both legal compliance and transparency while maintaining security.
The approval of a clawback amendment on the XRP Ledger in January underscores the significance of this feature. This amendment enables issuers to retrieve tokens under certain conditions while ensuring frozen tokens cannot be deposited into Automated Market Makers (AMMs). As a result, RLUSD can now be traded directly on the XRP Ledger’s decentralized exchange (DEX), offering greater flexibility while maintaining legal compliance.
Source: https://coinpedia.org/news/ripple-cto-david-schwartz-explains-rlusd-stablecoins-major-feature/
