Ripple Labs Inc., a San Francisco-based crypto solutions company and leading cross-border payment firm has revealed its plans to launch a fiat-backed stablecoin later in 2024. This move is expected to bring more liquidity and utility to the XRP Ledger (XRPL).
Announced on Thursday, the anticipated Ripple stablecoin will be pegged 1:1 to the United States Dollar (USD). This means that the Ripple stablecoin will be backed 100% by USD deposits, U.S. government bonds and cash equivalents to ensure trust, stability and utility. To further ensure its stablecoin’s transparency and reliability, Ripple noted that monthly third-party attestations will always be carried out on the cryptocurrency.
Notably, the Ripple stablecoin will be launched on both the XRP Ledger and Ethereum. According to the Silicon Valley tech company, launching the stablecoin on these blockchain networks is to enhance cross-chain interoperability adding that the future of crypto is multichain.
Moreover, Ripple expects the stablecoin introduction to expand its reach into both institutional and decentralized finance (DeFi) realms. Per the press release, the stablecoin is designed to enhance Ripple’s payments infrastructure and diversify its use cases.
Reacting to the strategic development, Ripple CEO Brad Garlinghouse wrote: “Launching a stablecoin is a natural step for Ripple as we bridge the gap between traditional finance and crypto. We have the years of experience, regulatory footprint, a strong balance sheet and a network with near-global payout coverage, to offer the best of crypto-enabled payments using XRP and our (future) stablecoin together.”
Ripple stablecoin to bring more utility and liquidity to the XRP Ledger.
Led by Tether (USDT), USD Coin (USDC) and Dai (DAI), the stablecoin market is booming with a total value of over $154 billion at press time, per Coingecko data. Despite projections to surpass a market capitalization of $2.8 trillion by 2028, there is a clear demand for trust, stability, and utility in the stablecoin market, especially with the prevailing transparency and regulatory issues faced by most top stablecoins.
Owing to this, Ripple is confident its high-quality enterprise-grade stablecoin would gain significant adoption from individuals, institutions and developers, citing its regulatory footprint. Thus, the Ripple stablecoin is expected to draw more traction to the XRPL as it is expected to generate more use cases, liquidity, and opportunities for developers and users. Overall, Ripple’s move into stablecoins is not just about innovation but to contribute to the XRPL.
Adding to how the stablecoin will help boost the XRP ecosystem, Ripple’s chief technology officer David Schwartz wrote: “A high-quality USD stablecoin on the XRPL – with its decentralized exchange and features like issued currencies, auto-bridging (that uses XRP as the native currency to facilitate trades between other assets), and the AMM (Automated Market Maker) — will be a gamechanger for users and devs.”
It bears mentioning that Ripple’s planned stablecoin launch comes months after the company secured regulatory clarity for the XRPL native token, XRP. At press time, XRP is the 7th largest cryptocurrency by market cap and is trading at $0.6, marking a 2.7% price gain in the past 24 hours.
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