This is why Ripple Labs’ new Stablecoin is important to you.
Ripple, the company behind the XRP Ledger, has announced its entry into the stablecoin market, currently dominated by players such as Tether's USDT and Circle's USDC.
The new stablecoin, which has yet to be named, will be pegged to the US dollar and is expected to launch later this year.
To launch Ripple Stablecoin
Ripple's offering aims to differentiate itself by being “100% backed by US dollar deposits, short-term US Treasuries and other currencies.” This step pays great attention to security and stability.
According to Ripple, the decision to enter a stable coin comes at a time when the market is experiencing significant growth. In fact, forecasts indicate that by 2028 it will expand to more than $ 2.8 trillion. The company plans to deploy the stable on the XRP Ledger and Ethereum blockchain, using ERC-20 tokens for wider compatibility and utility.
This move into stablecoins is interesting for the company, especially as Ripple wages a legal battle with the US Securities and Exchange Commission.
Ripple CEO Brad Garlinghouse highlighted the strategic importance of the new stablecoin. He emphasized on establishing stability and transparency by planning to conduct monthly public audits by a reputed accounting firm to ensure accountability and trust of users.
Bridging the gap between traditional finance and crypto, launching a stablecoin is a natural step for Ripple. “With years of experience, a regulatory footprint, a strong balance sheet and a network with global payment coverage, we have the network to deliver the best possible use of XRP and (future) stablecoins,” Garlinghouse said.
The stablecoin market is becoming increasingly popular with investors and traders looking to avoid the volatility associated with traditional cryptocurrencies such as Bitcoin and Ethereum. Ripple's entry marks a potential shift against the dominance of established cryptocurrencies such as USDT and USDC.
Read more: Guide to the Best Stablecoins in 2024
Ripple's approach reflects an integration-first mindset with a focus on corporate and banking customers. However, with USDC currently leading among compliance-focused consumers, Ripple's stablecoin will face the challenge of establishing itself in a competitive market.
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