Launch of Ripple’s USD Stablecoin on Upbit
On July 28, South Korean cryptocurrency platform Upbit launched trading for Ripple’s USD stablecoin (RLUSD), allowing transactions against the Korean won (KRW), Bitcoin (BTC), and Tether (USDT). The trading session was set to commence at 2:00 p.m. KST, pending adequate liquidity to support the new pairs.
Trading Restrictions and Initial Phase
Users could start making deposits and withdrawals within two hours following the announcement, although Upbit specified that only transactions related to the XRP Ledger version of RLUSD would be permitted, thereby excluding its Ethereum counterparts and those on other networks. To facilitate orderly trading during the initial phase, Upbit instituted several restrictions:
- For the first five minutes of trading, buyers were limited in placing orders.
- Sell orders priced more than 10% below the previous closing price were similarly controlled.
- For the first two hours post-launch, Upbit only accepted limit orders, sidelining market orders and other conditional trades.
The exchange retained the right to delay the commencement of trading should the liquidity fail to meet its standards.
Pre-Launch Pricing and Market Activity
Prior to the launch, Upbit quoted RLUSD at around 1,468.76 won, 0.00001583 BTC, and approximately 0.9995 USDT around 11:00 a.m. KST. These figures were not indicative of actual trades, as they were presented ahead of the trading commencement.
On the same day, RLUSD maintained a strong alignment with its target value of $1, showcasing a circulating supply of approximately 1.59 billion tokens. Upbit confirmed the specific address (rMxCKbEDwqr76QuheSUMdEGf4B9xJ8m5De) for RLUSD deposits on the XRP Ledger, clarifying this is the account for RLUSD issuance rather than an Ethereum smart contract address.
Deposit Instructions and Cautions
Customers were instructed to provide the correct destination tag for RLUSD transfers to ensure proper crediting to their accounts at Upbit, a common practice among XRP Ledger exchanges that utilize a single wallet address for multiple users. The exchange cautioned that deposits from unsupported networks might encounter complications for returns and added that transfers from platforms not adhering to South Korea’s Travel Rule could potentially go uncredited. Furthermore, personal wallet transfers were only permitted if ownership of the addresses had been validated by Upbit.
Significance of RLUSD’s Introduction
The introduction of RLUSD on Upbit is significant as it enhances accessibility to the stablecoin within a vibrant retail trading environment for XRP in South Korea. Before this, RLUSD was already available through Coinone, marking Ripple’s expansion in the local market, where it has also been working on tokenized securities and payment solutions.
Governance and Financial Backing
RLUSD is governed by Standard Custody & Trust Company, a subsidiary of Ripple, which operates under a New York limited-purpose trust charter recognized by the New York Department of Financial Services. Ripple claims that RLUSD is underpinned by cash and other highly liquid short-term assets held in dedicated reserve accounts, reporting $1.5086 billion in circulating supply and $1.6191 billion in reserve funds as of mid-July. The company also issues monthly third-party reports regarding these reserves.
Impact on Trading and Market Dynamics
The listing facilitates Korean traders to engage with RLUSD directly, eliminating the need to convert through international exchanges. This could also foster price discovery between South Korea’s local currency market and global dollar-stablecoin markets.
Moreover, RLUSD demonstrated significant trading activity with $2.5 billion generated on the XRP Ledger during a previous reporting period, with almost $900 million attributed to RLUSD/XRP trades, according to data from Ripple’s partner, Evernorth. However, the latest announcement from Upbit did not include any projections for trading volume or expectations regarding the transfer of RLUSD onto the platform.
The actual trading volume, order book stability, and deposit activity in the wake of this listing will ultimately determine the sustainability of the trading pool across these three markets. Upbit will also ensure that deposits comply with relevant Travel Rule and source-of-funds regulations throughout this process. Notably, current network support lacks any for Ethereum-based RLUSD holders, necessitating that they bridge or swap their tokens into the XRP Ledger format prior to making any deposits.
