The proposed stablecoin will be 100% backed by deposits in US dollars, short-term US government treasuries, and similar cash equivalents. Independent accounting firms will audit these reserve assets, with Ripple releasing monthly attestations.
The stablecoin market is about USD 150 billion in 2024, and is forecasted to exceed USD 2.8 trillion by 2028, as per the press release. There’s clear demand for stablecoins that deliver trust, stability, and utility. To meet this growing demand, Ripple will issue a stablecoin, leveraging its experience building financial solutions for institutions around the world.
At launch, the stablecoin will be available on the XRP Ledger (XRPL) and Ethereum (ETH) blockchains, with plans to expand to additional blockchains and decentralised finance (DeFi) protocols and apps over time.
Ripple's team explained that introducing their stablecoin on both the XRP Ledger and Ethereum will act as a crucial gateway to explore fresh opportunities for institutional and DeFi applications across various ecosystems. Leveraging the native functionalities of the XRP Ledger, such as a decentralised exchange and automated market maker, designed to utilise XRP as the bridge asset, will enhance adoption and foster development, thus enriching the ecosystem.
Key benefits of Ripple’s stablecoin include:
Enterprise-Grade: Ripple provides enterprise blockchain solutions, integrating XRP and stablecoin for enhanced payments, meeting demand for stablecoin payouts in emerging markets;
Compliance-First Mindset: Ripple prioritises regulatory compliance, boasting an expanding license portfolio across major global regions, including a New York BitLicense and numerous other licenses. Its acquisition of Standard Custody further broadens its license footprint, enhancing its ability to serve enterprise customers effectively;
Liquidity on the Decentralised Exchange (DEX): The XRPL accommodates various assets for trading on its decentralised exchange (DEX), offering swift global settlements with minimal transaction fees. Introducing reputable assets like Ripple's stablecoin to the DEX will yield multiple advantages for users, developers, and applications;
Transparent Stablecoin Reserve: Backed by a 1:1 reserve of cash and cash equivalents, Ripple's stablecoin is designed to ensure transparency and reliability. Once the stablecoin is available, Ripple will publish monthly attestations of the assets;
Multichain Compatibility: The Ripple stablecoin will be available on both XRP Ledger and Ethereum networks, ensuring compatibility for developers and users to transact securely. It will also expand to other blockchains, enabling cross-chain interoperability.
The stablecoin is expected to be available later in 2024, subject to regulatory approval.
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