Federal Reserve Explores Ripple’s RLUSD Stablecoin for FedNow Payment System

The U.S. Federal Reserve is making progress in exploring how to add Ripple’s XRP technology into its FedNow payment system, with a focus on Ripple USD (RLUSD).

It’s important to note that RLUSD is a proposed stablecoin from Ripple, pegged 1:1 to the U.S. dollar. It’s not the same as XRP, the cryptocurrency. This move is meant to use blockchain technology to boost transaction speed, reduce costs, and increase efficiency within the Federal Reserve’s real-time payment network.

Ripple’s RLUSD: A Stablecoin for Faster Payments

The integration of RLUSD into the FedNow system will help streamline financial transactions, offering a solution that bypasses the inefficiencies associated with traditional payment methods. Backed by U.S. dollar deposits, government bonds, and cash equivalents, RLUSD ensures both transparency and stability.

In addition, Ripple’s continued expansion of RLUSD has been marked by several partnerships. Recently, the company announced collaboration with platforms like Zero Hash and Revolut, increasing RLUSD’s availability. These partnerships are set to expand RLUSD’s utility, providing access to 14 exchanges and offering broader use for payments, trading, and financial applications.

Related: Stablecoins Rule the Day, But Which Crypto Sector Could Top Them?

Hedera’s Existing Role in FedNow

While Ripple’s integration is still underway, Hedera (HBAR) has already been successfully implemented within the FedNow system. As part of the move toward blockchain adoption in the U.S. financial system, Hedera’s blockchain infrastructure facilitates secure, real-time payments.

Experts believe the next phase may involve a deeper collaboration between Ripple and Hedera. Such a partnership could integrate RLUSD with Hedera’s infrastructure, increasing connectivity between blockchain networks.

The Changing Rules for Stablecoins

As technological advancements continue to reshape the payment world, the legislative system for stablecoins is also changing. The proposed Stable Act of 2025 addresses the risks associated with stablecoin issuance by introducing a two-year ban on those solely backed by self-issued digital assets.

In addition, lawmakers, including Chairman Hill and Senate Banking Committee Chair Tim Scott, are working towards establishing clear regulations that encourage innovation while ensuring consumer protection, aiming to maintain a balance in developing stablecoins.

Related: Ripple Expands Cross-Border Payments: New Licenses & RLUSD Stablecoin Set to Reshape 2025

Meanwhile, crypto analyst JackTheRippler shared on Twitter that the Subcommittee on the Golden Age of Digital Assets is scheduled to meet on February 11, 2025, to discuss these matters further.