Ripple, a blockchain-based payment protocol, has partnered with Chainlink, a decentralized oracle network, to improve the adoption and utility of its Ripple USD (RLUSD) stablecoin in decentralized finance (DeFi) applications.
The collaboration, announced on Jan. 7, will provide price feeds for RLUSD on Ethereum and the XRP Ledger, which aim to support cost-effective transactions and DeFi use cases for the enterprise-grade stablecoin.
RLUSD is pegged to the US dollar and will receive tamper-proof and accurate data from Chainlink through its decentralized nodes. The integration is designed to reduce risks of manipulation or downtime.
Colin Cunningham, head of tokenization and alliances at Chainlink Labs, told Cointelegraph that the integration is “a great signal for the market” and that the team is excited to support the RLUSD launch.
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Ripple’s RLUSD
The RLUSD stablecoin is backed 1:1 by the US dollar and is designed to facilitate cost-effective and secure transactions for payments, trading, lending and other DeFi use cases.
As a key component of its vision for blockchain-based finance, the integration with Chainlink ensures real-time high-quality market data on the stablecoin is available around the clock, Ripple said.
This consistent data will support smart contracts, mitigate manipulation or price inaccuracy risks, and help developers incorporate RLUSD into their applications, the company added.
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DeFi implications
Stablecoins like RLUSD bridge traditional finance and blockchain technology by facilitating fast, low-cost, borderless payments.
These assets play a critical role in DeFi, serving as a store of value, a hedge against market volatility and a medium of exchange.
Ripple’s adoption of Chainlink’s data standards supports its move into DeFi markets, with the partnership aiming to accelerate RLUSD adoption.
Cunningham said that projects like Ripple have “stood the test of time and weathered an unbelievable amount of change over the ups and downs of the crypto markets over the years.”
“The launch of RLUSD is continued affirmation of the stablecoin and tokenized asset sectors continuing to lead the blockchain industry forward.”
Related: Aave mulls Chainlink integration to return MEV fees to users
Chainlink integration with Coinbase
On Dec. 10, 2024, Chainlink also integrated with Project Diamond, the digital asset platform for global institutions founded by cryptocurrency exchange Coinbase.
Regulated by the Financial Services Regulatory Authority of the Abu Dhabi Global Market, Project Diamond’s integration with Chainlink provides data and enables full lifecycle management of newly tokenized assets.
Chainlink provides data and connects public and private blockchains with existing financial systems through its crosschain Interoperability Protocol.
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