Ripple, the issuer of XRP, has revealed its plans to launch a stablecoin backed by the US dollar. The company aims to compete with Circle and Tether in the stablecoin market over the next five years. In an interview with Cointelegraph, Ripple’s CTO David Schwartz discussed the upcoming stablecoin, which will be initially issued on the XRP Ledger and the Ethereum blockchain. Schwartz mentioned that the name and ticker for the stablecoin are yet to be determined and referred to it as the “Ripple stablecoin” for the time being. Ripple has been considering the idea of launching a stablecoin for more than a year and believes that the current stablecoin ecosystem is not as diverse and strong as it could be. Schwartz stated that there is room for another major player in the market, which is currently valued at $150 billion. Ripple’s stablecoin will be pegged to the US dollar at a 1:1 ratio and will be backed by US dollar deposits, short-term US government Treasurys, and other cash equivalents. The company aims to emulate Circle’s compliance-focused approach and compete with the issuer of USD Coin (USDC). Ripple plans to grab market share rather than take unnecessary risks with other people’s money. Schwartz also highlighted the importance of transparency and external audits, drawing comparisons to Tether’s early days. The reserve assets backing Ripple’s stablecoin will be audited by a third-party accounting firm, and the company will publish monthly attestations. Schwartz believes that Ripple has a credible claim to be one of the top players in the stablecoin market and is confident in the company’s reputation, track record, and strong balance sheet. Despite XRP’s focus on its real-time gross settlement system and remittance network, Ripple sees value in offering a stablecoin to serve non-bank payment companies that cannot use XRP or need additional liquidity. The introduction of a Ripple stablecoin will also complement the recently launched automated market maker by providing liquidity and capturing volatility and arbitrage opportunities between different assets.
Ripple to Introduce Stablecoin Pegged to US Dollar, Aiming to Rival USDT and USDC