Ripple, Developer Behind XRP Ledger, Enters Stablecoin Fray vs. Tether, USDC

Ripple, an enterprise blockchain service and creator of the XRP Ledger, is introducing its own stablecoin pegged to the price of the US dollar.

“The stablecoin market currently exceeds $150 billion and is projected to exceed $2.8 trillion by 2028,” Ripple said in a statement shared with CoinDesk. “There is a clear demand for stablecoins that provide trust, stability, and utility.”

The company said the token, which is scheduled to be released “later this year,” will be “100% backed by US dollar deposits, short-term US Treasuries, and other cash equivalents.” The stablecoin will initially be introduced on Ripple’s institutional XRP ledger along with the Ethereum blockchain and will be based on Ethereum’s ERC-20 token standard.

Ripple’s announcement comes as stablecoins are one of the most popular types of digital assets among crypto traders, as seen in larger cryptocurrencies such as Bitcoin (BTC) and Ethereum’s Ether (ETH). This was done in the absence of (theoretically) price fluctuations.

“What we think differentiates us is the fact that our assets are in dollars and U.S. Treasuries and are rock solid,” Ripple CTO David Schwartz said in an interview with CoinDesk. Told. “We’re not trying to squeeze every last few decimal places out of this. We’re looking to conquer the market and be there for the long term.”

As for why Ripple (which is currently battling an enforcement lawsuit by the U.S. Securities and Exchange Commission) decided to get into the stablecoin game, Schwartz said part of the reason for the decision was a simple “dollar and St.

“Some of it is just opportunism. It’s a growing market,” he said. “You could be a bank that doesn’t pay interest. That seems like a pretty good business opportunity.”

Schwartz said the new stablecoin could also help breathe life into the XRP Ledger’s decentralized finance ecosystem, which has a decentralized exchange but has relatively low usage compared to other chains. He said there is.

Schwartz said transparency, which has historically been a key point of scrutiny for stablecoin issuers, will be a key focus as Ripple rolls out new tokens.

“We will conduct a monthly public audit, preferably by a top accounting firm, which we will provide more details about later,” Schwartz said. “We aim for full transparency. As you know, we will do whatever it takes to address these issues.”

Beyond the promise of transparency, Schwartz said the potential growth of the stablecoin market, currently dominated by Tether’s USDT token and Circle’s USDC, could lead to fraud by Ripple and other stablecoin providers. He emphasized that this is a hindering factor. His Coinbase, a US-listed cryptocurrency exchange, circle investors.

“In the early days of Tether, people had expectations that Tether would blow up at some point, but it felt really sketchy,” Schwartz said. But now, “If you’re Tether, it doesn’t make sense to run away with people’s money,” Schwartz said. “Even if that was your plan, wait to execute because the market is only going to grow.”

In Ripple’s case, “We’re not trying to squeeze out a few extra pennies. There’s no need for that,” Schwartz said. “Our balance sheet is rock solid.”

Ripple’s CTO said his token is primarily aimed at corporate customers and banking institutions, and that “they need to justify their decisions to shareholders, regulators, etc., so that kind of The practical discussion is aimed at organizations that are less forward-thinking.

To meet the needs of this market segment, Ripple said it uses U.S. banks to hold its reserves and adopts a so-called “compliance-first mindset.”

While USDC is now the market leader among compliance-minded stablecoin consumers, Schwartz said he doesn’t see it as a “winner-takes-all” environment.

“If we were a solid No. 3 and the market grew 12x, that’s not a failure scenario,” Schwartz said. “Obviously we want to be better than that, but this is not a failure. It’s still a pretty good result.”

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