In a move that could bridge traditional finance and blockchain technology, Mastercard has teamed up with Ripple and Gemini to test settlements using RLUSD, Ripple's U.S. dollar-backed stablecoin, on the XRP Ledger (XRPL). This pilot aims to bring the speed and efficiency of blockchain to everyday credit card transactions. If it succeeds, it might be one of the first instances where a regulated U.S. bank handles fiat-based credit card settlements on a public blockchain.

The Pilot Explained

The setup connects Gemini's credit card, issued by WebBank, to Mastercard's settlement network. Instead of relying on slow traditional interbank transfers, transactions would settle directly in RLUSD on the XRPL. As Ripple's president Monica Long put it, "The goal is to bring blockchain speed and efficiency into the back-end of a payment flow consumers already know."

This isn't just about tech—it's about making payments faster and more reliable without changing how users or merchants interact with the system.

What is RLUSD?

RLUSD is Ripple's regulated stablecoin, launched in December 2024 under a New York Trust Charter. It's backed 1:1 by cash and cash equivalents, and it's already hit over $1 billion in circulation. Running natively on XRPL, it leverages the ledger's reputation for quick, low-cost transactions and built-in compliance tools.

For Mastercard, integrating RLUSD aligns with their push to weave regulated digital assets into existing payment systems, keeping things seamless for everyone involved.

Why It Matters

Right now, credit card settlements can drag on for 1-3 days between banks. With RLUSD on XRPL, that could shrink to seconds, even for cross-border payments. This means quicker settlements, reduced costs, and clearer audit trails for Mastercard. Banks and card issuers stand to gain from lower liquidity risks and smoother operations.

Of course, the full rollout hinges on regulatory nods, sufficient RLUSD liquidity, and XRPL's capacity to manage Mastercard-level volumes. But this pilot signals a big step toward mainstream blockchain adoption in finance.

For more details, check out the original tweet from BSCN. This development could open doors for meme tokens and other crypto assets by normalizing stablecoin use in traditional payments, making the blockchain ecosystem more accessible for practitioners.