In a bid to extend its reach into DeFi and Institutional investors, Ripple is set to launch a stablecoin pegged to the USD. The leading blockchain firm made the disclosure on Thursday via a post on its official page on X (formerly Twitter). In the post, Ripple revealed that the stablecoin will be based on its native XRP Ledger and the Ethereum network.
According to the blockchain firm, launching the stablecoin on the XRP Ledger and Ethereum is a manifestation of its belief that the future of cryptocurrency is multichain. Hence, launching the token on the two networks will “open doors to cross-chain interoperability.”
Furthermore, to establish “trust, stability, and utility,” Ripple revealed that the coin will have a full reserve that includes USD deposits, U.S. government bonds, and cash equivalents. Additionally, the firm disclosed that it will carry out a monthly third-party attestation as part of its commitment to transparency.
Why is Ripple Venturing into the Stablecoin Market
The firm explained that its entry into the $150 billion stablecoin market is not about innovation. Ripple explained that the move emanated as an attempt to contribute more to the XRPL ecosystem, and set the stage for a more robust crypto landscape. Similarly, the blockchain firm disclosed that it will help diversify its use cases and strengthen its payment system.
Similarly, Ripple highlighted that stablecoin is a pivotal pathway to the DeFi ecosystem. With the latest move, the blockchain firm is confident that it will help introduce a “trusted, enterprise-grade stablecoin to the XRP Ledger.” Therefore, generating more use cases, liquidity, and opportunities for developers and users alike.
Ripple in the disclosure emphasized that the stablecoin will help bring the worlds of traditional and decentralized finance together. Meanwhile, Ripple’s entry into the stablecoin sector will create more competition in a market that is under the dominance of Tether. Today, the stablecoin market is presently worth more than $150 billion with Tether’s USDT contributing more than $100 billion to the market cap.
According to market projections, the stablecoin market cap is likely to surpass $2.8 trillion by 2028. Tether is expected to be at the forefront of this projected growth due to how it has established itself as the most widely used stablecoins. Now, with the potential entry of Ripple, a renowned blockchain innovation firm, Tether’s place as a leader of the stablecoin market could be under threat.