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Ripple has announced plans to launch a stablecoin pegged to 1:1 to the US dollar (USD).
The stablecoin is 100% backed by USD deposits, short-term US government treasuries, and other cash equivalents. Ripple promises its stablecoin will be enterprise-grade and compliance-first.
Ripple said the move is intended to bolster relationships between TradFi and crypto.
"This is a natural step for Ripple to continue bridging the gap between traditional finance and crypto,” said Brad Garlinghouse, Ripple CEO.
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“Institutions entering this space are finding success by partnering with compliant, crypto-native players and Ripple's track record and resiliency speaks for itself, as we launch new products and acquire companies through multiple market cycles."
Initially, the XRP ledger (XRPL) and Ethereum blockchains will host the stablecoin but Ripple plans to expand to more networks over time. This should drive more liquidity and opportunities for XRP Ledger community developers and users, Garlinghouse said.
“Issuing our stablecoin on the XRP Ledger and Ethereum will serve as a pivotal entry point to unlock new opportunities for institutional and DeFi use cases across multiple ecosystems,” added Monica Long, Ripple President.
“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.”
The stablecoin market is worth $150 billion and is expected to exceed $2.8 trillion by 2028, according to Ripple.
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Tether (USDT) and USDC are the world's leading stablecoins, with market caps of over $106 billion and $33 billion respectively.
