Matz: Ruby is named after the precious gemstone, it’s not an abbreviation of anything. When I started the language project, I was joking with a friend that the project must be code-named after a gemstone’s name (àla Perl). So my friend came up with “ruby”. It’s a short name for a beautiful and highly valued stone. So I picked up that name, and it eventually became the official name of the language.

Taken from An Interview with the Creator of Ruby by Bruce Stewart