2024-4-4 17:00 |
Ripple has just announced plans to launch its own stablecoin, news that has seen the price of XRP surge more than 6% amid market’s reaction.
According to a press release on April 4, Ripple’s new stablecoin will be pegged 1:1 to the US dollar (USD) and be 100% backed by USD deposits, short-term US government treasuries, and other cash equivalents.
Ripple’s stablecoin will be based on the ERC-20 token standard.
The company says a third-party accounting firm will audit the stablecoin’s reserve assets, with Ripple publishing monthly attestations.
Ripple targets entry into projected $2.8 trillion marketThe current stablecoin market has a market capitalisation of about $150 billion, with top asset USDT accounting for $106 billion and the second-largest USDC with $33 billion today.
This market is projected to expand to over $2.8 trillion by 2028, the Ripple team noted in the announcement.
2/ This move extends Ripple's reach into both institutional and DeFi realms, diversifying use cases and enhancing our payments infrastructure, to bring the worlds of traditional and decentralized finance closer together.
— Ripple (@Ripple) April 4, 2024Driving the expected stablecoin market growth is the need for trust, stability, and utility, a core reason why the XRP creator plans an entry later this year. This will however be subject to regulatory approval.
“This is a natural step for Ripple to continue bridging the gap between traditional finance and crypto,” Ripple CEO Brad Garlinghouse said.
The development will be pivotal to fresh growth for XRP Ledger, Garlinghouse added. The company expects more use cases, liquidity and opportunities to emerge for both the developer community and XRP Ledger users.
As per the details, the new stablecoin will initially launch on the XRP Ledger and Ethereum before expanding to other blockchains and DeFi protocols.
“Issuing our stablecoin on the XRP Ledger and Ethereum will serve as a pivotal entry point to unlock new opportunities for institutional and DeFi use cases across multiple ecosystems,” Ripple President Monica Long noted.
XRP price reacts upward after newsXRP traded to highs of $0.61 after the news, bouncing from lows of $0.56 reached earlier in the day.
However, the altcoin remains below its late March highs of $0.63 as Bitcoin and other top altcoins struggle for momentum. XRP is also generally in a downtrend since reaching prices of $0.73 in mid-March.
The post Ripple announces plans to issue USD-backed stablecoin appeared first on Invezz
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