Ripple has announced its intention to launch a US dollar-backed stablecoin, with the desire to compete with established players such as Circle’s USDC and Tether’s USDT. According to David Schwartz, Ripple’s chief technology officer, the stablecoin market is estimated to exceed $2 trillion by 2028, indicating ample opportunity for new participants.
While details such as the stablecoin’s ticker symbol have yet to be decided, Ripple initially plans to issue the stablecoin on both the XRP Ledger and Ethereum blockchains. Schwartz emphasized the need for a more diverse and robust stablecoin ecosystem, given the current market capitalization of around $150 billion.
Ripple‘s stablecoin will hold a 1:1 peg with the US dollar, backed by US dollar deposits, short-term US government treasuries and other cash equivalents. The company aims to prioritize compliance, inspired by Circle’s USDC approach.
Transparency will be a key focus for Ripple, with its reserve assets scheduled to undergo third-party audits and publish monthly attestations. Schwartz likened the initial skepticism surrounding Tether’s USDT to concerns over the stability and reliability of reserve attestations. However, Ripple aims to instill confidence in its stablecoin by maintaining a transparent and compliant approach.
In sum, Ripple’s entry into the stablecoin market signals its ambition to capture market share while emphasizing compliance and transparency as key pillars of its offering.
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