Ripple has announced plans to launch its own “stable coin” pegged to the US dollar by the end of 2024.
1/ The stablecoin market is booming – around $150B today, and projected to soar past $2.8T by 2028. There's a clear demand for trust, stability, and utility.
That's why later this year we're launching a stablecoin pegged 1:1 to the USD on the XRP Ledger and Ethereum.…
— Ripple (@Ripple) April 4, 2024
According to the developers, the new asset will be 100% backed by deposits in dollars, short-term US government treasury bonds and other cash equivalents. It will be launched on the XRP Ledger and Ethereum networks.
Ripple CEO Brad Garlinghouse cited the company's years of experience and its “regulatory clout” as factors in “offering the best crypto payments” using XRP and its upcoming stablecoin.
Launching a stablecoin is a natural step for Ripple as we bridge the gap between traditional finance and crypto. We have 1/ the years of experience 2/ regulatory footprint 3/ a strong balance sheet and 4/ a network with near global payout coverage, to offer the best of… https://t.co/GlyqhYl9ES
— Brad Garlinghouse (@bgarlinghouse) April 4, 2024
The company's technical director, David Schwartz, comments Cointelegraph stated that he does not yet have an answer to the question of what the stablecoin will be called and what ticker it will receive.
According to him, the current stablecoin ecosystem is not as diverse and reliable as it could be. He estimated the current value of the segment at $150 billion and admitted that there is “room for another major player” in the market.
Schwartz added that the new asset will compete with USDT and USDC, the current leaders in the segment.
Circle Chief Strategy Officer Dante Disparte noted that the move to a dollar stablecoin “underscores how regulatory clarity in the US can create a growing market in the States and an export product in the form of digital dollars around the world.”
The price of XRP reacted to the news by rising 2.1%, according to CoinGecko. At the time of writing, the asset is trading around $0.59.
Plans to launch a stablecoin were announced almost a year after the decision was made in the case SEC against Ripple. In December 2020, the Commission filed a lawsuit against the firm, accusing it of selling unregistered securities in the form of XRP worth approximately $1.3 billion.
Garlinghouse and company co-founder Chris Larsen were also named defendants.
In July 2023, Judge Analisa Torres ruled in favor of Ripple. It ruled that program sales and other token distributions do not constitute the offering and implementation of investment contracts.
However, according to the verdict, the sale of coins to large industry players violated US securities laws. In October, the SEC dropped charges against Garlinghouse and Larsen.
The case regarding institutional sales of XRP by the company continues. In February 2024, the court granted the regulator’s request to provide Ripple with information on financial performance and the sale of tokens to large investors. In March, it became known that the SEC intended to request a fine of $2 billion for the company.
Source: Cryptocurrency
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