Ripple USD

The stablecoin for the Internet of Value

2024
Table of Contents

3 Executive Summary

4 Problem Statement

5 Introduction to Ripple USD

6 Product Description

7 Regulatory Framework and Reserve Description

8 Potential Use Cases

9 B2B Cross Border Payments

10 Foreign Exchange Markets
10 Global Access to a Digital Dollar
11 Trade Settlement Asset for Banks and Fund Managers
11 Real-World Asset Tokenization
11 On and Off Ramps

12 Conclusion

2
Executive Summary

For over a decade, Ripple has been an industry leader in

providing enterprise blockchain solutions that enable global
financial institutions, businesses, governments, and
developers to move, manage, store, and tokenize value –
helping to unlock greater economic opportunity for
everyone, everywhere.

Our vision has always been to build the Internet of Value - the idea that value should be able to move in the way
information moves today. Together with our customers and partners, Ripple is helping transform how people and
businesses access financial services, with products in commercial use by hundreds of global customers. These
businesses are able to expand into hard-to-reach markets, access alternative liquidity solutions, and develop new
blockchain-based solutions. As a next step in Rippleʼs product evolution, we are excited to announce Ripple USD
(“RLUSDˮ), a stablecoin designed to maintain a one-to-one value with the U.S. dollar (“USDˮ).

RLUSD is natively issued on the XRP Ledger (“XRPLˮ) and Ethereum networks using the XRPL Issued Currencies
and Ethereum Request for Comment 20 (“ERC20ˮ) token standards, respectively. RLUSD is issued by Standard
Custody & Trust Company, LLC (“SCTCˮ). SCTC is a wholly-owned Ripple subsidiary that maintains a charter from
the New York State Department of Financial Services (“NYDFSˮ) to operate as a limited purpose trust company
under the New York Banking Law.

Ripple aims to work within and improve existing financial systems, rather than disrupting them. We collaborate with
our institutional customers to streamline their underlying infrastructure, and work with regulators, governments,
and central banks to ensure our solutions are secure and compliant. Ripple holds licenses in the world's top
financial markets, including a limited purpose trust charter and BitLicense issued by the NYDFS, money transmitter
licenses, or the local equivalent, in 50 U.S. states and territories, a Major Payments Institution license from the
Monetary Authority of Singapore, a virtual asset service provider (“VASPˮ) registration from the Central Bank of
Ireland, and a VASP registration from the Cayman Island Monetary Authority.

Rippleʼs cross-border payments network is available in 90+ payout markets worldwide and has generated over
$70B in volume since its inception. The combination of RLUSD and the XRPLʼs native token, XRP, delivers an
elevated experience for customers of Rippleʼs multi-billion dollar payments network.

RLUSD, built with a focus on regulatory compliance, brings with it an opportunity for customers and users to
benefit from the stability and transparency Ripple is uniquely able to provide. The launch of RLUSD marks a
significant milestone in Rippleʼs journey to build the next evolution of global financial services and support the
Internet of Value.

3
Problem Statement

Since the first Bitcoin block was mined in 2009, the value of
the digital asset ecosystem has grown into trillions of dollars.
With the creation of tokenized real-world assets and
decentralized finance, the future of money is evolving before
our eyes.

To enable further mass adoption of blockchain solutions, a reliable, liquid, and stable store of value on blockchains
is needed. Stablecoins are specialized digital currencies intended to maintain a consistent value to that of another
asset like fiat currencies, cryptocurrencies, or commodities. They come in various forms, such as fiat-backed,
crypto-backed, algorithmic, and commodity-backed. While algorithmic stablecoins use supply adjustments to
maintain stability, several have failed, resulting in significant losses. Fiat-backed stablecoins, which are backed by
reserves of traditional fiat currency and usually subject to regulatory oversight, are considered among the most
reliable and trusted in the market today. Nevertheless, some unregulated stablecoins continue to maintain a strong
presence, despite ongoing debates over their backing and transparency.

The stablecoin market is worth well over $100 billion today and, per some analyst estimates, is expected to reach
the trillions in the next few years. Currently, the market is heavily concentrated between a couple of issuers that
account for nearly 90% of the total stablecoin market capitalization. This creates considerable risk within the
ecosystem and the need for a new stablecoin – built with compliance and longevity in mind – to diversify and add
balance.

Given their stability and fungibility, stablecoins are a promising technology that can evolve traditional mediums of
exchange. Cross-border payments are plagued by high costs, slow transaction times, and a lack of transparency,
making it inefficient for both individuals and businesses. Traditional methods often involve multiple intermediaries,
leading to increased complexity and higher fees. Additionally, the volatility of exchange rates and liquidity
challenges further complicate cross-border transactions. Stablecoins can address these issues by offering faster,
cost-effective, and transparent transactions, lessening the need for intermediaries and providing predictable,
stable value transfers.

RLUSD is a fiat-backed stablecoin that is issued in accordance with the NYDFS stablecoin guidance. It is
specifically designed with institutional and cross-border payment customers in mind, yet is available for wider use
in the rapidly growing digital asset economy.

4
Introduction to Ripple USD

With innovative solutions in cross-border payments and

digital asset custody, Ripple has played a key role in bridging
the divide between blockchain & traditional finance for over
a decade. During this time, Ripple has tirelessly built trust &
credibility with enterprises and financial institutions. Ripple
USD, Ripple's entry into the stablecoin market, further builds
on this legacy.

RLUSD is issued on the XRPL and Ethereum networks. By utilizing the XRPL, RLUSD takes advantage of high speed
and economical transaction costs. Concurrently, Ethereum offers smart contract functionality and flexible
programmability of onchain use cases for RLUSD to grow.

SCTC and other regulated Ripple subsidiaries will issue and distribute RLUSD in compliance with applicable
regulations and industry best practices. Direct customers are limited to enterprise institutions that meet bank-level
Know Your Customer (“KYCˮ) and Anti-Money Laundering (“AMLˮ) requirements with regular sanctions screening
of both customers and wallets. SCTC, a New York limited purpose trust company and the issuer of RLUSD, is
subject to requirements of the New York Banking Law and supervision of the NYDFS. Consistent with NYDFS
stablecoin guidance, RLUSD is backed one-to-one by USD or permitted cash equivalents, with segregated reserve
accounts, regular audits, clear redemption rights, and other regulatory standards that are designed to protect
holders of RLUSD. In short, RLUSD brings together the stability of the USD with the efficiency and transparency of
blockchain technology in a compliant manner. Addressing the vital need for a trustworthy, liquid, and regulated
stablecoin, RLUSD aims to deliver a strong solution for a variety of use cases, from international payments to
decentralized finance.

3 KEY TRAITS ATTRIBUTED TO RIPPLE

by a survey of 531 enterprises and financial institutions

INNOVATIVE WELLRESPECTED TRUSTWORTHY

5
Product Description

Built with enterprise-grade security and compliance in mind,

RLUSD is issued on multiple blockchain networks, offering a
reliable solution for business transactions.

RLUSD is a multi-chain stablecoin natively issued on both the XRPL and Ethereum networks. The XRPL is a
high-performance blockchain that has reliably processed over 85M ledgers (blocks) since 2012. Built with
payments in mind, the XRPL is an open-source blockchain offering:

● Speed - transactions are confirmed on average in three to five seconds

● Low-cost - transaction fees are nearly fixed at $0.0002/tx

● Scalability - the XRPL has the ability to process 1,500+ transactions per second

RLUSD transactions on the XRPL are settled quickly, incur some of the lowest fees in the industry, and can scale
for significant real-world use cases. RLUSD is a foundational asset for building additional blockchain-based
solutions for enterprises on the XRPL, while the Ethereum network provides a diverse user base and
programmability for RLUSD to deliver added utility.

The native issuance of RLUSD on the XRPL and Ethereum networks utilizes the XRPL Issued Currencies and
ERC20 token standard respectively. The XRPL Issued Currencies feature has been in production for 10+ years and
is native to the XRPL. Issued Currencies on the XRPL supports Trust Lines, a security feature that enables a wallet
to not accept an asset from an issuer without approval from the owner.

RLUSD on the Ethereum network utilizes the UUPSUpgradeable pattern, a proxy-based approach to upgrading
smart contracts on Ethereum. It allows for the implementation (logic) contract to be updated while maintaining the
same token address so that users of RLUSD can reliably track the currency via the stable token address. The
ERC20 and Proxy/Upgrader contracts have been audited by multiple independent third parties to ensure they meet
the highest market standards.

SCTC, the issuer of RLUSD, retains exclusive control over RLUSDʼs key functionalities including minting and
burning. These operations are governed by onchain roles assigned to SCTCʼs internal accounts and are secured by
a custom MultiSign contract that requires multiple authorized signatures to validate transactions. The
multi-signature model involves a committee of known signers, ensuring that no single SCTC employee can execute
critical actions independently.

For wallet addresses on the Office of Foreign Assets Controlʼs (“OFACˮ) Specially Designated Nationals (“SDNˮ) list,
SCTC's policy is to freeze RLUSD associated with those wallet owners or addresses. This policy also applies to
addresses identified to have been used for fraudulent activity or money laundering. SCTC will also freeze RLUSD
pursuant to a court order. On the XRP Ledger, freezing the trust line will result in the userʼs inability to transfer
RLUSD to a wallet other than the Issuing Account, while on the Ethereum blockchain, the user will not be able to
transfer or receive RLUSD. Further, SCTC will prevent the address from transacting in RLUSD in the future.

6
Regulatory Framework and Reserve Description

Limited Purpose Trust

RLUSD is issued in accordance with NYDFS stablecoin guidance, which sets forth requirements designed to
protect stablecoin holders. Some of these requirements include:

● Regulatory Compliance: The NYDFS provides a framework for stablecoin issuers that establishes
clear requirements related to the timely redemption of stablecoins, the safekeeping of stablecoin
reserve assets, and independent third-party attestations to verify the reserve. SCTC is subject to
oversight by the NYDFS for compliance with these requirements.

● Reserve Protections: The NYDFS requires stablecoins issued by a limited purpose trust to
maintain one-to-one value with USD at all times, meaning that the market value of the reserves is
at least equal to the nominal value of all outstanding units of the stablecoin as of the end of each
business day. The reserve must be held in segregated accounts for the benefit of stablecoin
holders, which is intended to protect the reserve from other creditors.

● Transparency and Accountability: The NYDFS establishes disclosure requirements and

publication of monthly attestations by an independent Certified Public Accountant to verify the
reserves backing the stablecoin. This ensures the stablecoin reserve is accurately reported,
managed, and disclosed in a transparent manner and on a regular basis.

RLUSD Reserve Management

The RLUSD Reserve is composed of a mixture of USD and permitted cash equivalents, including, but not limited to,
government money market funds and short-term U.S. Treasury Bills, held at NYDFS-approved depository
institutions and custodians. The RLUSD Reserve is managed in accordance with the standards approved by
RLUSDʼs regulators and held in segregated accounts.

SCTC engages an independent Certified Public Accountant to conduct regular attestations to ensure full
accountability of its issued stablecoin and underlying reserve assets. These attestation reports are made publicly
available on a monthly basis and detail the reserve composition.

7
OVERVIEW

Potential
Use Cases
RLUSD allows for various use cases to facilitate financial
markets. Ripple will use RLUSD as a component of the
companyʼs multi-billion dollar cross-border payments platform.
While built with cross-border payments and institutional
adoption in mind, RLUSD is available for many other
integrations as well. Described below are just a few of the
immediate potential use cases RLUSD is able to serve.
POTENTIAL USE CASES

B2B Cross Border Payments

Ripple Payments has hundreds of institutional customers in over 50 countries and across 6 continents. To date,
Ripple Payments has completed over 35M lifetime transactions worth nearly $70B, and is available in 90+ payout
markets.

RLUSD will be used as a means of payment on the Ripple Payments network. New and existing customers can take
advantage of the benefits a stablecoin on the XRPL provides, such as near real-time settlement, network effects,
and low transaction costs. The combination of RLUSD and XRP as bridge assets for Ripple Payments improves
upon the efficiencies of the network and provides an enhanced customer experience. Over time, Ripple may launch
or utilize other third-party stablecoins benchmarked to different fiat currencies found across the globe. This allows
Ripple Payments to better serve its customers in different localities who wish to utilize digital assets within their
local markets. Until that time, RLUSD serves as a core payment tool that Ripple Payment customers can utilize to
facilitate their payments and better serve their users.

90
PAYOUT MARKETS
CRYPTO AND FIAT

35M
LIFETIME TRANSACTIONS

70B
$USD

ESTIMATED TRANSACTION VALUE

9
POTENTIAL USE CASES

Foreign Exchange Markets

The foreign exchange (“FXˮ) market is the largest in the world, with daily trading volumes more than 10 times the
combined volumes of the global bond and equities markets. In their current form, traditional FX markets penalize
smaller traders and businesses by charging them high commissions, suboptimal exchange rates, and slow
settlement times. These disadvantages are due in part to the lack of a global centralized clearinghouse, the
involvement of multiple intermediaries, and high settlement risks. The inherent benefits that stablecoins provide
over traditional fiat make them an optimal asset for addressing the inefficiencies of traditional FX markets. The
ability to atomically settle trades onchain via stablecoins can significantly lower the spreads FX traders are
charged, decrease settlement time to seconds versus days, and increase transparency, all while simultaneously
removing multiple intermediaries who each extract a fee. RLUSD could be used as a major FX tool for institutions all
over the world.

Global Access to a Digital Dollar

Stablecoins have the potential to transform financial inclusion by offering an accessible and stable medium of
exchange to businesses and individuals. Many economies across the globe deal with local currency volatility,
making it difficult for businesses to succeed due to the resulting unpredictable business environment, increased
costs, and challenges in financial planning. Access to USD, the dominant global currency for trade and settlement,
can provide businesses in developing economies with a stable medium of exchange. By adopting a stablecoin that
is designed to maintain one-to-one value with USD, such as RLUSD, businesses can reduce the uncertainty
associated with local currency volatility.

RLUSDʼs international distribution and inclusion in Rippleʼs international payment flows allows the unbanked and
underbanked a new pathway to better secure their money, pay for goods, and send money to family and
friends—all without needing to pay the high fees many banks and payment processors charge in developing
economies.

TOP 3 REASONS PEOPLE PICK

ONE STABLECOIN OVER
ANOTHER
Liquidity
Ripple excels at ensuring liquidity through our strong relationships with exchanges and
market makers via our global payments network

Confidence
Ripple is an industry leader in the blockchain enterprise space with proven credibility built on
over a decade of experience

Transparency
RLUSD is issued in accordance with the NYDFS stablecoin guidance and provides
transparency of the reserves that back it

10
POTENTIAL USE CASES

Trade Settlement Asset for Banks and Fund Managers

Stablecoins offer a compelling solution for banks and fund managers seeking efficient trade settlement assets.
Their ability to facilitate instant, real-time transactions can significantly enhance the speed and efficiency of
settlements, which can take several days if market participants are intermediated by different banks and clearing
systems. By leveraging stablecoins, such as RLUSD, financial institutions can minimize the delays and liquidity
issues often associated with traditional fiat currency settlements. Additionally, stablecoins can reduce operational
costs and optimize capital usage by providing a seamless, digital alternative to conventional settlement processes.
The inherent transparency and security of blockchain technology further bolster trust and reliability, making
stablecoins a valuable asset in modern financial ecosystems.

Real-World Asset Tokenization

Real-world assets (“RWAsˮ) are tangible assets such as real estate, commodities, and government bonds that are
tokenized on a blockchain network to increase their liquidity and accessibility. The integration of stablecoins with
RWAs addresses a critical barrier to adoption: RWA market volatility. RWA markets are best served by stablecoins
to ensure the asset is properly priced and to facilitate efficient market operations worldwide by using a stable
medium of exchange. This stability may attract more market participants who require predictable returns and can
reduce the risks associated with holding tokenized assets. Regulated and transparent stablecoins, like RLUSD, can
address this challenge by stabilizing RWA markets, allowing participants worldwide to engage with confidence.

On- and Off-Ramps

Blockchain users often find it difficult and expensive to access digital assets with existing on-ramps. Given their
ease-of-use and ubiquity across protocols, stablecoins provide on-ramps a simple and easy method to onboard
more customers. RLUSDʼs ability to reduce volatility, offer faster processing times versus traditional fiat currency
payment methods, and low transaction fees make it an ideal asset for on- and off-ramp integrations. Ripple
Payments already has the ability to serve 90+ crypto and fiat payout markets. Rippleʼs existing institutional
customers will be able to bring money on chain more easily by utilizing RLUSD as a secure and trusted on-ramp
asset.

TOP 3 USE CASES OF STABLECOINS

A Ripple survey of 450 stablecoin users identified the following three use cases as the top
ways users utilize their stablecoins.

91 % 70 % 63%
CRYPTO TRADING PEER TO PEER PAYMENTS SAVINGS

11
Conclusion About Ripple
Ripple is a leading provider of digital
asset infrastructure for financial
institutions—delivering simple,
compliant, reliable software that
unlocks efficiencies, reduces friction,
and enhances innovation in global
RLUSD is a step forward in the finance. Rippleʼs solutions leverage the
XRP Ledger and its native digital asset,

evolution of digital assets, combining XRP, which was purpose-built to enable

fast, low-cost, highly scalable

the stability and ubiquity of the U.S. transactions across developer and
financial use cases. With a proven track

dollar with the efficiency and

record working with regulators and
policymakers around the world, Rippleʼs
payments, custody and stablecoin
transparency of blockchain solutions are pioneering the digital
asset economy—building credibility and
technology. By addressing the critical trust in enterprise blockchain. Together
with customers, partners and the
need for a reliable, liquid, and developer community, we are
transforming the way the world creates,
compliant stablecoin, RLUSD stores, manages and moves value.

provides a robust solution for a Learn more at ripple.com.

variety of use cases, from Join the Conversation

x.com/ripple

cross-border payments to DeFi linkedin.com/company/rippleofficial

ripple.com/insights

integration.
facebook.com/rippleofficial

With Ripple's track record of building trusted onchain enterprise

solutions, users can be confident in RLUSDʼs issuance and
management. The combination of regulatory compliance required
under SCTCʼs limited purpose trust, technological innovation, and
market expertise makes RLUSD capable of meeting the demands of
the growing digital economy.

Ripple is committed to maintaining the highest standards of

transparency, security, and compliance so that RLUSD remains a
trusted payments token worldwide. As the digital asset landscape
continues to evolve, Ripple will continue to innovate and adapt, driving For further information on RLUSD,
the adoption of blockchain solutions and contributing to the including compliance policies and
development of trusted payment rails for the Internet of Value. potential risks, see RLUSD user terms.

12