Ripple, a prominent player in the cryptocurrency space, has announced its foray into the stablecoin market with the launch of a new token pegged to the U.S. dollar. With this move, Ripple aims to challenge the dominance of established stablecoins like Tether and Circle in the $150 billion market.
The new stablecoin will maintain a one-to-one value with a diverse portfolio of U.S. dollar assets, including deposits, government bonds, and cash equivalents, held by Ripple as reserves. To ensure transparency, Ripple plans to release monthly attestation reports regarding its reserves, although the auditing firm has not been disclosed.
6/ Ripple's move into stablecoins isn't just about innovation; it's about contributing to the #XRPL ecosystem and setting the stage for a more robust and diverse crypto landscape.
Learn more about the Ripple stablecoin: https://t.co/s770qUys8Y
— Ripple (@Ripple) April 4, 2024
In a recent interview with CNBC, Ripple CEO Brad Garlinghouse cited stability concerns with existing stablecoins like Tether’s USDT and Circle’s USDC as a driving factor behind Ripple’s decision to enter the market. Both USDT and USDC have faced value fluctuations due to issues with reserve backing, such as the terraUSD collapse in 2022 and the impact of Silicon Valley Bank’s failure on USDC in 2023.
Garlinghouse emphasized Ripple’s regulatory compliance and licensure in multiple jurisdictions, including New York, Ireland, and Singapore, as a key differentiator. He highlighted the regulatory uncertainties surrounding current market leaders, positioning Ripple’s regulated status as a strategic advantage in the stablecoin market.
