Ripple, a key player in the enterprise blockchain and crypto solutions market, has recently announced plans to release a stablecoin, pegged at a 1:1 ratio with the US Dollar (USD). This stablecoin will be entirely backed by US dollar deposits, short-term US government treasuries and other cash equivalents, a press release from the company reveals. Greenlit regulatory approval is expected to be granted later this year, thereby allowing Ripple to officially rollout its new product.
Stablecoins function as cryptocurrencies, with value directly tied to another currency or commodity. According to the announcement, at launch, Ripple's stablecoin will be accessible on the XRP Ledger (XRPL) and Ethereum (ETH) blockchains. Within the company's future plans lies an expansion to additional blockchains, Decentralised Finance (DeFi) protocols and apps.
With the current stablecoin market value standing at approximately US$150 billion, projections suggest that it may well exceed US$2.8 trillion by 2028. Underlying this growth, Ripple identifies clear demand for stablecoins that embody trust, stability and utility. The release of Ripple’s stablecoin is an attempt to meet this burgeoning demand, marking an important milestone for the company that has over a decade’s experience constructing real-world financial solutions for global institutions.
Brad Garlinghouse, Ripple's CEO, explains: "This is a natural step for Ripple to continue bridging the gap between traditional finance and crypto. 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."
Concurred by Monica Long, Ripple's President, the Ripple stablecoin aims to "unlock new opportunities for institutional and DeFi use cases across multiple ecosystems." Issuing their stablecoin on the XRPL and Ethereum she claims "will serve as a pivotal entry point". She views the development as instrumental to driving increased user-adoption, opportunity and development, contributing significantly to a "vibrant ecosystem".
The Ripple stablecoin will integrate several key benefits. Firstly, Ripple specialises in providing blockchain-based enterprise-level solutions that are greatly needed by financial institutions and enterprises. The newly launched Ripple stablecoin will be used to enhance the present customer experience. Secondly, Ripple commits to a compliance first mindset, holding regulatory licences in essential regions globally. Lastly, the Ripple stablecoin's transparent reserve is expected to ensure reliability and transparency for its users.
As a provider of enterprise blockchain and crypto solutions for over a decade, Ripple has been a key name in offsetting the immense issues associated with cross-border payments through utilising blockchain and crypto on a large scale, the company shared in a statement. An addition to Ripple's payment and custody infrastructure, its stablecoin will expand the company's global presence. Ripple's journey and evolution in the crypto world continues with the launch of its own stablecoin.