Ripple Introduces Stablecoin Tied to the US Dollar, Aiming to Rival USDT and USDC

Ripple, the issuer of XRP, has revealed its plans to enter the stablecoin market and compete with Circle and Tether. In an interview with Cointelegraph, Ripple’s CTO, David Schwartz, discussed the company’s upcoming stablecoin, which will initially be launched on the XRP Ledger and the Ethereum blockchain. While the name and ticker for the stablecoin have not yet been decided, Schwartz referred to it as the “Ripple stablecoin” for now. Ripple has been considering the launch of a stablecoin for over a year, as Schwartz believes that the current stablecoin ecosystem lacks diversity and robustness. With the stablecoin market currently valued at $150 billion, Ripple sees an opportunity to become a major player. The stablecoin will be pegged to the US dollar at a 1:1 ratio and backed by US dollar deposits, short-term US government Treasurys, and other cash equivalents. Ripple aims to emulate Circle’s compliance-focused approach and compete with USD Coin (USDC). The company plans to audit its reserve assets with a third-party accounting firm and publish monthly attestations. Schwartz drew parallels to the early days of Tether, where concerns were raised about the issuer’s credibility and the security of its reserve attestations. However, Ripple’s strong reputation, track record, and balance sheet will help it establish a presence in the stablecoin market. Schwartz believes that Ripple has a credible claim to be among the top players in the market. Additionally, the introduction of a stablecoin will complement Ripple’s existing services, such as its real-time gross settlement system and remittance network that primarily caters to financial institutions. The stablecoin will provide liquidity and capitalize on volatility and arbitrage opportunities between different assets.