XRP, the native token of the XRP Ledger (XRPL), surged during Tuesday's U.S. afternoon trading after Ripple CEO Brad Garlinghouse announced that Ripple's stablecoin, RLUSD, received final regulatory approval from the New York Department of Financial Services (NYDFS). "We have final approval from NYDFS for RLUSD! Exchange and partner listings will be live soon," Garlinghouse shared on X (formerly Twitter).

The news propelled XRP to a 10% rally, erasing earlier losses and outperforming the broader crypto market, including bitcoin and the CoinDesk 20 Index. Ripple, known for its focus on institutional payments, aims to compete in the growing stablecoin market with RLUSD, a cryptocurrency backed by short-term U.S. government bonds. Stablecoins, valued at nearly $200 billion today, are a critical component of the crypto economy and are expected to grow significantly in the coming years.

Ripple President Monica Long highlighted the company’s goal of using RLUSD to support payments services and facilitate real-world asset tokenization, a growing trend that uses blockchain technology to make traditional financial transactions more efficient. RLUSD, currently in beta testing on the XRP Ledger and Ethereum networks, has been operationally ready, awaiting regulatory clearance for public launch.

Analytics firm CryptoQuant reports that $41.7 million worth of RLUSD tokens exist on Ethereum and $10.4 million on XRPL. Ripple's entry into the stablecoin market positions it to challenge industry leaders Tether (USDT) and Circle (USDC) as the sector expands in the coming years.