Ripple prepares to start testing stablecoin launch after SEC case ends

• Ripple has announced private testing of its RLUSD stablecoin on XRP Ledger and Ethereum.
• RLUSD is awaiting regulatory approval before users can buy and trade with it.
• XRP fell over 6% after the announcement.

Ripple revealed on Friday that it has begun beta testing for its RLUSD stablecoin, pending regulatory approval for its use. Meanwhile, XRP is down more than 6% in the last 24 hours, but could see a rally after the announcement.

XRP falls amid Ripple’s move to launch USD stablecoin

Ripple has begun testing the US dollar-backed stablecoin Ripple USD (RLUSD) on the XRP Ledger and Ethereum Mainnet, according to an announcement on its X handle on Friday. The fintech company plans to release the stablecoin to the public after regulatory approval.

The company claims that RLUSD will be fully backed by the US dollar and linked to its price 1:1. The asset will also be backed by short-term US Treasuries and other cash equivalents. Ripple also claims that a third-party accounting firm will audit reserve assets and provide monthly reports.

Ripple originally announced its intention to launch a stablecoin in April. The company states that the stablecoin will help users by bringing high-quality assets to the XRP Ledger.

The new milestone comes days after it ended a two-year regulatory battle with the Securities & Exchange Commission (SEC) that lasted four years, dating back to December 2020. The case was finally settled on Wednesday after what a court decided a civil penalty of 125 million dollars. commission as opposed to the SEC’s request for a $2 billion fine.

Meanwhile, XRP is down 6.9% in the last 24 hours to $0.57. Many supporters argue that the stablecoin move, along with the end of its SEC regulatory hurdle, will prove an optimistic catalyst for XRP.

On the daily charts, XRP could drop to fill the liquidity gap around the $0.5 price level. A trend line connecting April 13, June 7, July 13, and August 7 could provide support for XRP to see a rally if it approaches this level.

XRP /USDT Daily Chart

The thesis is reinforced by the Relative Resistance Index (RSI) line moving below the yellow moving average line and the Stochastic Oscillator %K line crossing below the %D line.

An upward move above $0.64 will invalidate the bearish thesis.