Prominent crypto payment firm Ripple has announced its new entry into the $150 billion stablecoin market, planning to launch a stablecoin on the XRP Ledger later this year.
Ripple communicated this new move via a press statement published on its official website in the last few hours. The firm also shared snippets of the update via its official X handle.
1/ The stablecoin market is booming – around $150B today, and projected to soar past $2.8T by 2028. There's a clear demand for trust, stability, and utility.
That's why later this year we’re launching a stablecoin pegged 1:1 to the USD on the XRP Ledger and Ethereum.…
— Ripple (@Ripple) April 4, 2024
Ripple’s Entry into the $150B Market
In the report, Ripple pointed out the flourishing state of the stablecoin market, noting it is currently worth about $150 billion. Moreover, the payment firm cited that the market is expected to bourgeon by about 18 times to hit $2.8 trillion in the next four years.
In light of the anticipated market share, Ripple plans to launch a stablecoin pegged to the U.S. dollar in a one-to-one ratio before this year ends. Ripple noted that the stablecoin will operate solely on the XRP Ledger and Ethereum in the initial phase.
Meanwhile, in the spirit of cross-chain interoperability, the payment firm plans to welcome other blockchain networks to its stablecoin.
In February, on-chain sleuth Mr. Huber questioned why Ripple had not launched a stablecoin on the XRP Ledger since it leverages the network for its ODL (now Ripple Payments) service. Some pointed out the firm’s commitment to continue using XRP as a bridge currency.
In the latest announcement, Ripple noted that launching a stablecoin aligns with its target of institutional players and the broader decentralized finance space. The overall goal is to merge the gap between the traditional financial landscape and the DeFi spheres.
Notably, Ripple’s stablecoin will be collateralized with U.S. government bonds, USD deposits, and cash equivalents.
Ripple Executives React
Ripple’s leadership, including its CEO Brad Garlinghouse and CTO David Schwartz, have remarked on the significance of the firm’s new pivot to stablecoins. Garlinghouse said:
“Launching a stablecoin is a natural step for Ripple as we bridge the gap between traditional finance and crypto. We have the years of experience … to offer the best of crypto-enabled payments using XRP and our (future) stablecoin together.”
Launching a stablecoin is a natural step for Ripple as we bridge the gap between traditional finance and crypto. We have 1/ the years of experience 2/ regulatory footprint 3/ a strong balance sheet and 4/ a network with near global payout coverage, to offer the best of… https://t.co/GlyqhYl9ES
— Brad Garlinghouse (@bgarlinghouse) April 4, 2024
On the other hand, Ripple CTO David Schwartz asserted that the incoming stablecoin will be a game-changer due to XRPL’s DEX and pivotal features like issued assets, auto-bridging, and the AMM.
A high-quality USD stablecoin on the XRPL – with its decentralized exchange and features like issued currencies, auto-bridging (that uses XRP as the native currency to facilitate trades between other assets), and the AMM — will be a gamechanger for users and devs. https://t.co/uGC72bosfM
— David "JoelKatz" Schwartz (@JoelKatz) April 4, 2024
Interestingly, XRP has witnessed a dramatic 4% gain into the $0.6 territory in the last few hours following Ripple’s announcement.