Ripple Warns of Market Volatility as Its New Stablecoin RLUSD Hits the Market

David Schwartz, the company's Chief Technology Officer, also cautioned investors about potential supply shortages while advising against fear-of-missing-out (FOMO) behavior.

Ripple has warned that its stablecoin might encounter volatility when it hits the market, following approvals in New York. The company's Chief Technology Officer, David Schwartz, also cautioned investors about potential supply shortages while advising against fear-of-missing-out (FOMO) behavior.

His remarks come amid reports of unusually high pre-launch bids for RLUSD, the USD-pegged stablecoin designed for Ripple's cross-border payment solutions. Ripple noted that the volatility, which suggests heightened speculative interest, will subside. In a post on social media, it assured users that the stablecoin will stabilize once it achieves equilibrium in supply and demand.

"But rest assured, the price will come back to very close to $1 as soon as supply stabilizes. If it doesn't, something is very seriously wrong. If you want to spend a lot of money to get a tiny bit of RLUSD before anyone else does, you can," Schwartz added.

"But please don't expect the price to stay over $1 once things stabilize, which I expect they will do very quickly. Please don't FOMO into a stablecoin! This is not an opportunity to get rich."

Ripple created RLUSD for institutional clients to complement the broader adoption of XRP. The stablecoin aims to connect fiat currencies and digital assets, facilitating improved cross-border transactions.