According to blockchain data, major RLUSD burns took place on the XRP Ledger (XRPL) on Tuesday. The market cap of the token has now shrunk to just $1.4 billion, CoinGecko data shows.
Roughly 146 million tokens have been destroyed within hours, the data shows. The burns were significant enough for Ethereum to overtake the XRPL as the primary network for RLUSD issuance.
At its peak, the stablecoin's total market capitalization reached nearly $1.9 billion.
Fresh competition
The decline has notably coincided with the arrival of Open USD (OUSD), which is a new major USD stablecoin.
Ripple announced that it had joined a consortium of more than 140 financial, technology, and crypto companies that will adopt the new dollar-pegged cryptocurrency with a shared governance model.
The initiative includes major names such as BlackRock, Mastercard, Google, Visa, and Stripe. Open USD will be operated by the independent Open Standard organization, which sets it apart from other offerings.
USDC will aspire to solve longstanding issues surrounding scalability, governance, and incentives.
The development has prompted discussion within the XRP community about how Open USD could affect Ripple's own dollar-pegged stablecoin.
X user @nietzbux welcomed Ripple's participation, arguing that a consortium-backed stablecoin could accelerate crypto adoption and actually benefit XRP.
Others questioned the implications for RLUSD. Anodos CEO Panos Mekras noted that Open USD would inevitably compete with Ripple's existing stablecoin, which is also quite obvious.
Circle shares remain under pressure
The announcement appears to have affected Circle, which had its blockbuster IPO earlier this year.
Shares of Circle fell more than 15% after the introduction of the major competitor.
However, analysts at William Blair described the selloff as an overreaction, arguing that USDC's established liquidity and market position would be difficult for any newcomer to replicate.
"We welcome continued innovation and competition in the space and look forward to remaining laser-focused on building the best stablecoin infrastructure possible and driving more customer and partner success," Circle CEO Jeremy Allaire stated in a recent social media post.
