Blockchain/cryptocurrency company Ripple plans to launch a dollar-pegged stablecoin.
The coin will be backed 100% by U.S. dollar deposits, short-term U.S. government treasuries, and other cash equivalents, according to a Thursday (April 4) press release.
“This is a natural step for Ripple to continue bridging the gap between traditional finance and crypto,” Ripple CEO Brad Garlinghouse said in the release.
“Institutions entering this space are finding success by partnering with compliant, crypto-native players and Ripple’s track record and resiliency speaks for itself, as we launch new products and acquire companies through multiple market cycles.”
Garlinghouse added that the move was a notable one for the community surrounding Ripple’s XRP Ledger, “driving more use cases, liquidity and opportunities for developers and users.”
The stablecoin will launch on the XRP Ledger and Ethereum blockchains, the company said, with plans to expand to other blockchains and decentralized finance protocols and apps.
The release notes that the current stablecoin market is at around $150 billion, and is projected to surpass $2.8 trillion by 2028.
“There’s clear demand for stablecoins that deliver trust, stability, and utility,” the company said. “To meet this growing demand, Ripple will issue a stablecoin, leveraging its decade-plus of experience building real-world financial solutions for institutions around the world.”
Last month Tether, the leading global stablecoin, surpassed $100 billion in circulation, a milestone that has fueled debate about the role of digital currencies in finance.
As noted here, Tether’s rapid growth and large reserves have led to concerns among regulators and analysts about potential risks to both the cryptocurrency market and the wider financial system if the stablecoin were to fail. In spite of these doubts, Tether has stressed its commitment to transparency and financial prudence.
In other recent Ripple news, the company announced in February it was planning to expand its payments business in the U.S.
“After being relatively quiet for the past 3 years in the US for Ripple Payments, we’re geared up to announce new product updates powered by our money transmitter licenses (MTLs) that cover the majority of US states,” Ripple senior director and head of product marketing, W. Oliver Segovia, wrote on LinkedIn.
Ripple also recently announced it had updated its crypto-enabled cross-border payments solution, rebranding it from RippleNet to Ripple Payments.
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