Ripple Sets Timeline for Launch of Its Own Stablecoin

Ripple has announced plans to launch its own stablecoin, pegged to the US dollar, by the end of 2024.

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

“This move expands Ripple’s capabilities in both the institutional and DeFi sectors, diversifying use cases and enhancing our payment infrastructure to bridge the worlds of traditional and decentralized finance,” the statement said.

According to developers, the new asset will be 100% backed by dollar deposits, short-term US government treasury bonds, and other cash equivalents. It will be launched on the XRP Ledger and Ethereum networks.

“Stablecoins serve as a key entry point into DeFi. Introducing a reliable enterprise-level stablecoin on the XRP Ledger will create more use cases, liquidity, and opportunities for developers and users,” the company clarified.

Ripple CEO Brad Garlinghouse cited the company’s years of experience and its “regulatory footprint” as factors enabling it to “offer the best crypto payments” using XRP and the forthcoming stablecoin.

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

Ripple’s CTO David Schwartz told Cointelegraph that he currently has no answer regarding the stablecoin’s name or ticker symbol.

“For now, you’ll have to call it Ripple’s ‘stablecoin’,” he told the publication.

He noted that the existing stablecoin ecosystem is not as diverse and reliable as it could be. He estimated the current segment value at $150 billion and suggested there is “room for another major player” in the market.

Schwartz added that the new asset will compete with USDT and USDC, the current leaders in the segment.

The news prompted a response from Jeremy Allaire, co-founder and CEO of Circle, co-issuer of USDC. He welcomed Ripple’s plans, calling them a “bold step.”

Welcome to the dollar stablecoin party, @Ripple. It is encouraging to see more companies taking a compliance-first approach to building onchain dollars. Congrats on taking the plunge!https://t.co/KyFVqNitts

— Jeremy Allaire (@jerallaire) April 4, 2024

Circle’s Chief Strategy Officer Dante Disparte noted that the shift to a dollar stablecoin “highlights how regulatory clarity in the US can create a growing market domestically and an export product of digital dollars worldwide.”

Congrats @bgarlinghouse, @s_alderoty and @Ripple team — your move into dollar #Stablecoins, like PayPal’s before it, underscores how U.S. regulatory clarity can create a growing market in the U.S. and an export product of digital dollars around the world. https://t.co/9JPWrr6qli

— Dante Disparte (@ddisparte) April 4, 2024

The price of XRP reacted to the news with a 2.1% increase, according to CoinGecko. At the time of writing, the asset is trading around $0.59.

The plans for launching the stablecoin come nearly a year after the decision in the SEC case against Ripple. In December 2020, the Commission filed a lawsuit against the firm, accusing it of selling unregistered securities in the form of XRP worth approximately $1.3 billion.

Garlinghouse and company co-founder Chris Larsen were also named as defendants.

In July 2023, Judge Analisa Torres ruled in favor of Ripple. She determined that programmatic sales and other distributions of the token do not constitute an offer and sale of investment contracts.

However, according to the verdict, sales of coins to major industry players violated US securities laws. In October, the SEC dropped charges against Garlinghouse and Larsen.

The case regarding institutional sales of XRP by the company continues. In February 2024, the court granted the regulator’s motion for Ripple to provide information on financial metrics and token sales to major investors. In March, it was revealed that the SEC intends to seek a $2 billion penalty for the firm.

Forbes recently criticized 20 different blockchains for their lack of utility, including Ripple’s XRPL.