Woke up to $60 million evaporated...Why did Ripple burn RLUSD?

▲ Ripple, RLUSD/AI generated image

The stablecoin RLUSD, issued by Ripple, has been burned on a large scale. This burning occurred amidst a surge in network activity ahead of the month-end, drawing significant market attention.

According to a report by virtual asset media outlet U.Today on April 28 (local time), 59,364,323 RLUSD were burned on the XRP Ledger. This burning occurred as Ripple adjusted the circulating supply ahead of commercialization. Some analysts suggest it is part of a technical test. Ripple has been repeatedly issuing and burning RLUSD in recent months to check network stability.

As the end of the month approaches, the number of transactions within the XRP Ledger is on an upward curve. Experts analyze that these activities are a preparatory step for combining Ripple's enterprise payment solutions with stablecoins. RLUSD's value is pegged to the US dollar at a 1:1 ratio. It is designed to operate simultaneously on both Ethereum (ETH) and the XRP Ledger.

This large-scale burning primarily took place on the XRP Ledger. Ripple emphasized that RLUSD will be issued based on strict regulatory compliance and transparent collateral management. They plan to enhance trustworthiness by disclosing the status of dollar reserves through monthly external audits. The market is interpreting this as a sign that the official launch of RLUSD is imminent.

Ripple is currently awaiting final approval from the NYDFS. Once approved, RLUSD will be actively used as a cross-border payment method for institutions worldwide. The Ripple ecosystem is simultaneously undergoing technical enhancements and regulatory compliance to increase its completeness.

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