Ripple, a leading provider of enterprise blockchain and crypto solutions, has announced plans to launch a stablecoin backed by the US dollar (USD), marking its entry into the $154.7 billion stablecoin market.
As per a Thursday blog, the new stablecoin, which will be 100% backed by USD deposits, short-term US government treasuries, and other cash equivalents, is designed to ensure transparency and reliability.
Notably, Ripple’s stablecoin will be available on the XRP Ledger (XRPL) and Ethereum (ETH) blockchains, with plans to expand to additional blockchains and decentralized finance (DeFi) protocols and apps over time. The move is expected to drive more use cases, liquidity, and opportunities for developers and users in the XRP Ledger community.
Commenting on the development, Ripple CEO Brad Garlinghouse noted that the stablecoin launch is a “natural step” for the company as it bridges the gap between traditional finance and crypto.
“We have 1/ the years of experience 2/ regulatory footprint 3/ a strong balance sheet and 4/ a network with near global payout coverage, to offer the best of crypto-enabled payments using XRP and our (future) stablecoin together.” Garlinghouse added.
Elsewhere, Monica Long, Ripple President, emphasized the strategic significance of issuing the stablecoin on the XRP Ledger and Ethereum networks, foreseeing numerous opportunities for institutional and DeFi use cases across various ecosystems.
Notably, key benefits of Ripple’s stablecoin will include its enterprise-grade nature, compliance-first mindset, liquidity on decentralized exchanges (DEX), transparent reserve, and multichain compatibility. Leveraging its vast experience in blockchain-based enterprise solutions, Ripple aims to integrate both XRP and the stablecoin into its payment infrastructure, enhancing customer experience and serving as a pioneering enterprise use case for the asset at scale.
With the stablecoin market forecasted to exceed $2.8 trillion by 2028, Ripple’s foray into the stablecoin market is set to position XRP into super bullish use cases as the community envisions the highly-coveted $5 price point. This venture pits Ripple against stablecoin giants Tether, which is behind the largest stablecoin UDST, and Circle, the issuer of USDC.
Ripple’s regulatory compliance and growing license portfolio in key regions around the globe, including a New York BitLicense, nearly 40 money transmitter licenses across the US, and other jurisdictions like Singapore and Ireland is also expected to give it an edge over its competitors.
Ripple’s foray into the stablecoin market comes as it faces a legal battle with the U.S. Securities and Exchange Commission (SEC) over the status of XRP. However, the company remains undeterred, boasting a dozen regulatory compliance and an extensive license portfolio.
That said, the news of Ripple’s stablecoin launch was well-received by the Ripple community, with XRP experiencing a 9% surge within minutes after the announcement. At press time, the crypto asset was trading at $0.59, reflecting a 1.40% surge over the past 24 hours.
