In a notable development, blockchain developer Ripple Labs recently announced its plans to launch a stablecoin pegged 1:1 to the US dollar (USD).
Ripple Enters Booming Stablecoin Market
According to the company’s announcement on Thursday, the stablecoin’s reserves will consist of US dollar deposits, short-term US Treasury bills, and other undisclosed cash equivalents. All of these will be audited by a third-party accounting firm. Ripple plans to publish monthly certifications to ensure transparency.
With the stablecoin market currently valued at around $150 billion, Ripple’s entry is significant. The market is projected to exceed $2.8 trillion by 2028, highlighting the potential for growth and adoption.
Ripple CEO Brad Garlinghouse emphasized the importance of partnerships with compliant, crypto-native players for success in this space. He highlighted Ripple’s track record in launching new products and acquiring companies across various market cycles.
Garlinghouse believes that this move is not only a significant step for Ripple but will also positively impact the XRP Ledger (XRPL) community, driving more use cases, liquidity, and opportunities for developers and users.
Institutional And DeFi Adoption Across Multiple Ecosystems
Initially, the stablecoin will be available on the XRP Ledger and Ethereum (ETH) blockchains. Ripple plans to expand its presence to additional blockchains and decentralized finance (DeFi) protocols and applications.
Monica Long, Ripple President, stated that issuing the stablecoin on XRPL and Ethereum will unlock new opportunities for institutional and DeFi use cases across multiple ecosystems. Long further stated:
The XRP Ledger’s native capabilities, including a decentralized exchange and automated market maker, were built to utilize XRP as the bridge asset. Bringing a trusted stablecoin onto XRPL will drive more adoption and development, contributing to a vibrant ecosystem
Ultimately, Ripple’s stablecoin is expected to launch later this year, pending regulatory approval in the US market. The introduction of this stablecoin is a significant development that has the potential to reshape the stablecoin market while offering new opportunities for institutions, developers, and users alike.
Featured image from Shutterstock, chart from TradingView.com