Ripple Taps Ethereum and XRP Ledger to Unveil USD-Backed Stablecoin

Crypto payments firm Ripple is readying to unveil its dollar-pegged stablecoin in 2024. The San Francisco-headquartered fintech firm revealed on Thursday, April 4, plans to enter the stablecoin segment by unveiling a USD-pegged stablecoin to run across the XRP Ledger and Ethereum blockchains. 

The software company led by Brad Garlinghouse revealed its plans to roll out its crypto stablecoin fully backed by US dollars. The Ripple Labs plans to back the unnamed crypto stablecoin with cash equivalents and US government treasuries. 

Ripple Plans Monthly Attestations to Proof of Deposits Backing Stablecoin

Ripple Labs revealed in the release that it will issue monthly attestations of the US dollars, treasuries, and cash equivalents backing the stablecoin. The firm indicated that a third-party accounting firm would audit its holdings. 

The Ripple chief technology executive David Schwartz reiterated that the firm considers the stablecoin market, currently valued at $150 billion, will explode to a trillion-dollar segment. Ripple believes that stablecoin’s potential to explode is a clear opportunity that the crypto firm behind the XRP token could leverage. 

Schwartz considers Ripple Labs uniquely positioned to curve a niche within the competitive stablecoin space. The technology executive hailed Ripple’s presence on the institutional aspect via the payments product. 

Stablecoin Inevitable as Ripple Eyes Active Trading Market

Shwartz observed that on Ripple’s XRP Ledger side, the crypto firm has made notable entries into the space’s decentralized finance (DeFi) section. The executive considers that institutional and DeFi constitute a pair of big buckets where stablecoins have proved helpful today.

The entry into the stablecoin segment is set to compete with Tether’s USDT and Circle’s USD Coin (USDC). Ripple acknowledges watching the duo closely for several years. 

Schwartz revealed that Ripple boasts a strong balance sheet besides its existence for an extended period. He indicated that it has eight years of offering enterprise blockchain, earning an impressive license suite.

Schwarts revealed that Ripple resolved the need for jurisdictional nexus regarding stablecoin in the US. It considers replicating Tether’s approach, where the USDT stablecoin issuer is headquartered in the British Virgin Islands. 

Ripple Optimistic of Stablecoins Deposit in Banks

Ripple is optimistic that US customers can deposit their stablecoins at their banks. Also, the tech executive hopes clients can merge enterprise and retail usage with the products offered within the traditional financial (TradFi) space. 

Schwartz reflected on why it was unveiling stablecoin, admitting the idea had existed within the company for a lengthy period. He indicated that participants admitted it would ease life, joking that it offers the issuer a license to print money.  

Schwartz confessed that subsequent conversations on the stablecoin idea made sense. The arguments for stablecoin illustrated that it is likely to witness elevated demand from the emerging markets witnessing inadequate access to dollarized assets. 

Given the high interest among enterprise firms pursuing the dollar-pegged stablecoin, Schwartz considers stablecoins inevitable. Ripple has constantly engaged customers who are currently not using the existing stablecoins. 

Ripple’s chief technology executive illustrated that most respondents noted the absence of great stablecoins on the XRP ledger. The executive observed that Ripple has recently devoted itself to expanding use cases on the XRP Ledger, as witnessed in the addition of an automated market maker (AMM). 

Stablecoin to Expand XRP Ledger’s On-chain Usage

Schwartz is inevitable to expand on-chain usage on XRP Ledger. Its unveiling illustrates the necessity of having another prominent crypto asset besides XRP. 

The executive ruled out the capacity of one to make a market by using a single asset. Having more great assets yields a compelling trading atmosphere.  

Schwartz illustrated that though the upcoming stablecoin will debut on XRP Ledger and Ethereum, it plans to expand to additional blockchains. Such expansion is reliant on demand and use cases. 

Schwartz explained that the reason for the early announcement before the stablecoin rollout is crucial to allow Ripple to survey the engagement. Also, it will help discover where the opportunities exist.  

Schwartz illustrated that Ripple’s team is aware of aspects it considers will realize the desired success. The executive admitted that Ripple is open to adjustment relative to how the ideas resonate in the stablecoin market.