In a notable development, blockchain developer Ripple Labs recently announced plans to launch a stablecoin pegged 1:1 to the United States dollar (USD).
Ripple Enters the Booming Stablecoin Market
According to the company announcement On Thursday, the stablecoin's reserves will consist of US dollar deposits, short-term US Treasury bills and other undisclosed cash equivalents. All of these will be audited by a third-party accounting firm. Ripple plans to release monthly certifications to ensure transparency.
With the stablecoin market currently valued at around $150 billion, Ripple's entry is significant. The market is expected to exceed $2.8 trillion by 2028, highlighting the potential for growth and adoption.
Ripple CEO Brad Garlinghouse highlighted the importance of partnerships with compliant and crypto-native players to succeed in this space. He highlighted Ripple's track record of launching new products and acquiring companies during different market cycles.
Garlinghouse believes that this move is not only an important milestone for Ripple, but will also have a positive impact on the XRP Ledger (XRPL) community, generating more use cases, liquidity, and opportunities for developers and users.
Institutional Adoption and DeFi Across Multiple Ecosystems
Initially, the stablecoin will be available on the XRP Ledger and Ethereum (ETH) blockchains. Ripple plans to expand its presence to additional blockchains and decentralized finance (DeFi) protocols and applications.
Monica Long, President of Ripple, said that issuing the stablecoin on XRPL and Ethereum would open new opportunities for institutional and DeFi use cases across multiple ecosystems. Long further added:
The XRP Ledger's native capabilities, including a decentralized exchange and automated market maker, were designed to use XRP as a transition asset. The introduction of a trusted stablecoin on XRPL will drive further adoption and development, contributing to a vibrant ecosystem.
Ultimately, Ripple's stablecoin is expected to launch later this year, pending regulatory approval in the US market. The introduction of this stablecoin is a significant development that has the potential to reshape the stablecoin market while providing new opportunities for institutions, developers and users.
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