A few weeks ago, Ripple, the US-based cross-border payments, announced plans to launch a U.S. dollar-backed stablecoin later this year. The upcoming stablecoin, designed to bridge the gap between traditional finance and the cryptocurrency ecosystem, is slated to launch on the XRP Ledger (XRPL) and the Ethereum blockchain.
Targeting a Growing Market
In a recent interview with Fox Business’s Maria Bartiromo, Ripple CEO Brad Garlinghouse highlighted the significant growth potential of the stablecoin market, currently valued at $150 billion.
Experts predict the market could reach a staggering $2.8 trillion by 2028. Garlinghouse emphasized the opportunity for a U.S.-based, compliance-focused stablecoin to capture a significant share of this burgeoning market.
Read Also: Ripple CEO Speaks On Game-Changing Plan To Launch USD Stablecoin On XRP Ledger
He believes the market needs a stablecoin that adheres to U.S. regulations. Entities outside the U.S. control the major stablecoins, and Garlinghouse aims to increase trust and push for widespread adoption in the U.S. market through the Ripple stablecoin.
Covered a lot of ground with @MorningsMaria today – the BTC halving, my predictions for the crypto market by EOY, how pro-innovation policies in the US will prevail (step 1 – replace the SEC leadership and step 2 – Elizabeth Warren’s staff should read some actual facts on crypto… https://t.co/1EB59xUB7J
— Brad Garlinghouse (@bgarlinghouse) April 18, 2024
Although Ripple has faced some regulatory hurdles in the U.S., Garlinghouse recently revealed in January that XRP’s regulatory clarity has opened up the U.S. market, and the U.S.-based stablecoin could further expand the reach of cryptocurrencies.
Garlinghouse also revealed that 95% of Ripple’s clients are outside the U.S., and the company has gained significant global traction. Through the stablecoin, Ripple can open up the market in the U.S., allowing millions of Americans to enjoy the benefits of decentralized finance.
Building a Robust Stablecoin Ecosystem
Beyond the stablecoin itself, Garlinghouse emphasized Ripple’s commitment to constructing a comprehensive infrastructure around it. This infrastructure will be designed to maximize the benefits for both the company and its XRP token.
The upcoming stablecoin will be backed by a transparent reserve system comprising U.S. dollars and highly liquid assets like short-term U.S. Treasuries. To ensure complete transparency, Ripple will engage a third-party accounting firm to conduct regular audits of the reserve. Additionally, monthly reports detailing the reserve composition will be made publicly available.
Ripple’s reputation for developing secure, enterprise-grade blockchain solutions will extend to the stablecoin system. Furthermore, Ripple prioritizes regulatory compliance and actively seeks necessary licenses in key regions. The company’s successful regulatory approvals in Singapore and Ireland last year exemplify this commitment.
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The stablecoin’s presence on XRPL, a blockchain known for supporting various assets, will introduce new avenues for liquidity. However, Ripple will also cater to a broader crypto audience, as the stablecoin will launch on the Ethereum blockchain.
This multichain compatibility strategy mirrors similar approaches adopted by other major stablecoin issuers. Ripple has also expressed plans to expand compatibility to include other prominent blockchains.
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