Market experts recently introduced how the upcoming Ripple stablecoin RLUSD could help push up the XRP price.
Ripple's stablecoin RLUSD is expected to launch by the end of this month, pending regulatory approval from New York authorities. Reports suggested a release three days earlier, but Ripple exposed these mistakesconfirm that it is still awaiting approval.
Meanwhile, speculation surrounding RLUSD has sparked discussion about its potential impact on XRP, with market observer Laquita Powell recently asking how this development could affect its price trajectory. presents a theory about
RLUSD as a stable medium of trading
of Explanation We pointed out that the main advantage of RLUSD is that it can minimize volatility during XRP trading. Traditionally, institutions and banks use fiat currencies such as the US dollar to acquire XRP.
These transactions may be subject to currency fluctuations, increasing complexity and risk. However, by using RLUSD as a stable intermediary, financial institutions can execute large purchases of XRP without worrying about sudden changes in value.
Improving XRP liquidity and liquidating the order book
This theory turns out to increase the potential of RLUSD. XRP market liquidity. A large XRP purchase using RLUSD could clear a significant portion of the exchange's order book.
For example, if a bank deposited $1 billion in RLUSD and used it to buy XRP, the stablecoin could run out of sell orders at lower price levels one after another. This process increases prices. Low price XRP They become less available and the market moves towards higher price points.
Interestingly, this scenario could cause a rapid spike in the XRP price, especially if financial institutions place large buy orders. As the availability of cheaper XRP decreases, demand increases and the base price of the order book is set higher.
Even as the price of XRP rises, the asset's utility and demand will remain intact due to its inherent advantages, such as the speed and cost efficiency of international payments.
In particular, RLUSD provides a stable mechanism to facilitate these transactions and support continued XRP adoption. This could encourage more institutions to take advantage of XRP, driving demand and price growth.
Example scenario
In their commentary, experts presented specific scenarios that demonstrate this theory. Interestingly, in this scenario, a bank deposits $1 billion into RLUSD and holds it on an exchange or in a Ripple-backed wallet.
After this, the bank after that Purpose RLUSD Buy XRP. Start with a low price order and clear a significant portion of the order book, pushing the price from $0.50 to over $5. Nevertheless, XRP is currently trading at $2.4 and these purchases could start above $2 and increase from there.
If XRP goes higher price levelthese prices set a new standard as the supply of low prices dries up. Additionally, banks leverage XRP for international payments. RLUSD continues to be a stable vehicle for these activities. Because it guarantees System efficiency.
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