Ripple’s Chief Technology Officer, David Schwartz, has confirmed that the Ripple USD (RLUSD) stablecoin includes a clawback feature, allowing it to be frozen or reversed to comply with legal and regulatory mandates. This revelation aligns with amendments to the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which requires stablecoin issuers to implement transaction control mechanisms for regulatory oversight.
Schwartz’s statement came during a discussion on X (formerly Twitter) sparked by attorney Jeremy Hogan, who questioned whether stablecoin issuers like Ripple and Circle could freeze or claw back tokens post-transfer. Schwartz clarified that RLUSD’s clawback functionality is designed to ensure ledger balances align with legal obligations, a capability activated on the XRP Ledger (XRPL) in January 2024 after a 90% community vote. This feature underscores Ripple’s commitment to regulatory adherence.
The clawback function allows token issuers to retrieve assets, such as those mistakenly sent to Automated Market Maker (AMM) pools, preventing liquidity issues. Ripple can also act under court orders or law enforcement requests. RLUSD, natively issued on both the XRP Ledger and Ethereum blockchains, supports this feature across both networks. A validator known as Vet confirmed that Ripple could enforce clawbacks if mandated by judicial rulings.
The GENIUS Act, introduced on February 4, 2025, and amended in March, mandates stablecoin issuers to include mechanisms for freezing, burning, or halting transfers under legal orders. This applies primarily to issuers with market caps over $10 billion, like Tether (USDT) and USD Coin (USDC). With RLUSD’s market cap at $135.1 million, it falls under state oversight but still complies with these standards. The XRP Ledger’s AMMClawback amendment further restricts frozen tokens from entering AMM pools, balancing compliance with decentralized exchange (DEX) liquidity.
While some crypto users argue that clawback undermines decentralization, others view it as a critical safeguard. Regulatory bodies increasingly demand such features to enforce accountability and mitigate financial risks, making them a standard in the stablecoin space.
The XRP Ledger recently integrated with RWA.xyz, a platform offering real-time tracking of tokenized assets. This partnership boosts market transparency, enabling institutions to monitor RLUSD and other assets effectively. The system provides insights into asset movements and stablecoin liquidity, supporting compliance efforts. As RLUSD’s clawback feature ensures legal transparency and prevents fraud, it positions Ripple as a compliant player in the evolving regulatory landscape.
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