The announcement that blockchain firm Ripple Labs would produce a stablecoin tied exactly to the US dollar (USD) is a noteworthy move.
Deposits in US dollars, short-term US Treasury notes, and other unknown cash equivalents will make up the stablecoin’s reserves, as stated in Thursday’s statement by the firm. Professional accountants from outside the company will check all of these. Ripple intends to maintain openness by publishing certificates on a regular basis.
It is a big deal that Ripple is getting into the stablecoin industry, which is worth around $150 billion right now. The industry has a lot of room to expand and be adopted, with projections showing it will surpass $2.8 trillion by 2028.
Partnerships with compliant, crypto-native players are crucial for success in this market, according to Ripple CEO Brad Garlinghouse. He spoke about how Ripple has successfully introduced new products and acquired businesses over several market cycles.
According to Garlinghouse, this is a huge milestone for Ripple and will have a good effect on the XRP Ledger (XRPL) ecosystem, leading to greater options for developers and users as well as new use cases and liquidity.
The XRP Ledger and the Ethereum (ETH) blockchains will be the first to support the stablecoin. Ripple intends to increase its visibility across a wider range of blockchains and DeFi protocols and apps.
Ripple President Monica Long said that the stablecoin’s issuance on XRPL and Ethereum would open up new possibilities for institutional and DeFi use cases in various ecosystems. Long went on to say:
“Built within the XRP Ledger from the ground up are features like an automated market maker and a decentralized exchange that can use XRP as its bridge asset. Adding a reliable stablecoin to XRPL would encourage further development and adoption, which will strengthen the ecosystem.”
Finally, Ripple’s stablecoin is anticipated to be released later this year, subject to US market regulatory clearance. There will be new options for consumers, developers, and institutions with the launch of this stablecoin, which might significantly alter the stablecoin industry.
