The XRP community is buzzing with excitement following Ripple’s recent announcement of plans to launch a USD-backed stablecoin on the XRP Ledger (XRPL) to compete with Tether (USDT) and USD Coin (USDC) in the stablecoin market.
According to the report, the stablecoin will launch before the end of 2024, raising speculation on how it could impact the digital token XRP in terms of price.
This move comes amid a projected surge in the stablecoin market, which is currently valued at over $150 billion but is expected to reach a staggering $2.8 trillion by 2028. Ripple highlighted these among other reasons for its move into the stablecoin market.
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The prospect of this significant market expansion has motivated Ripple to capitalize on the opportunity. By introducing a USD stablecoin directly on the XRPL, Ripple aims to position itself as a key player in this rapidly growing sector. However, this news has sparked discussions about the potential impact on XRP.
The announcement by Ripple has generated a wave of optimistic commentary within the cryptocurrency community, particularly concerning the potential benefits it holds for XRP. Analysts are closely examining how integrating this new utility might influence the value of XRP within the XRPL ecosystem.
One prominent figure, Rob Cunningham (@KuwlShow), founder of KWUL Research, offered a specific XRP price prediction based on the projected $2.8 trillion market size for stablecoins by 2028. Cunningham’s analysis hinges on the assumption that the market will experience a significant expansion, potentially growing by nearly 20 times in the next four years.
Based on this projected market growth, Cunningham estimates that XRP could see a similar growth trajectory, reaching $12 within the next four years. This estimation considers the anticipated surge in utility for XRP caused by Ripple’s stablecoin initiative. Cunningham also acknowledges the possibility of XRP exceeding this value due to its established functionalities beyond the stablecoin market.
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Not all in the crypto community share Cunningham’s optimistic outlook. Panos Mekras (@panosmek) expressed reservations regarding the methodology behind the $12 XRP price target. Mekras argues that Cunningham’s approach assumes a direct correlation between the projected market size of stablecoins and the specific value of XRP.
Mekras emphasizes a crucial distinction: the $2.8 trillion market capitalization refers to the entire stablecoin market, not just Ripple’s stablecoin. Additionally, Mekras pointed out that the funds going into Ripple’s stablecoin project were independent from XRP.
An increase in the issuance of Ripple’s stablecoin does not necessarily translate to a direct rise in XRP’s price. However, other initiatives suggest digital token has a bright future in the crypto market.
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