At the Paris Blockchain Week earlier this month, Ripple CEO Brad Garlinghouse explained why his company is developing a US dollar-linked stablecoin for its payments platform. The new digital currency is expected to be released by the end of this year, as announced by Garlinghouse.
Ripple Plans to Improve XRPL Liquidity with Stablecoin
A Ripple executive admitted that stablecoins have demonstrated their significance as a link between Traditional Finance (TradFi) and Decentralized Finance (DeFi) over the course of time. Normally, investors in digital assets employ this token, which is typically tied to a stable fiat currency, to amplify transactions, offer liquidity for currency hedging, and shield their portfolios from crypto market fluctuations.
Stablecoins can be used instead of traditional methods for international money transfers and protection against inflation. XRP, which is developed by Ripple, has already made a name for itself in handling such cross-border transactions. However, Ripple aims to expand its capabilities this time by utilizing the proposed stablecoin to boost its public blockchain, XRP Ledger (XRPL).
For a cross-border payments company like Ripple, introducing a stablecoin is a logical next step, according to Garlinghouse. As stated in a Ripple announcement, the firm intends to use both XRP and the stablecoin in its payment system to enhance the user experience and represent the first major application of this asset on a large scale. Customers of Ripple in emerging markets have expressed interest in the ability to make stablecoin payouts.
According to Garlinghouse, Tether and Circle are two successful stablecoin issuers that he believes will continue to thrive in the industry. He expressed Ripple’s desire to participate in the expanding $150 billion stablecoin market, where USD stablecoins dominate.
According to Garlinghouse’s declaration, the value may reach approximately $3 trillion within the next 4-5 years. It has been observed that the introduction of a stablecoin on various Layer-1 platforms (L1) leads to significant liquidity expansion. With this in mind, Ripple aims to boost liquidity on its own protocol through the launch of its stablecoin.
Ripple’s Stablecoin to Compete with USDT and USDC
Based on Ripple’s standing and recognition within the cryptocurrency community, it is expected that their new stablecoin will pose significant competition for USDT and USDC. Moreover, Ripple’s international compliance with various regulatory bodies following its run-in with the SEC is an additional strength that could help it establish a strong presence in the stablecoin sector.
Monica Long, Ripple’s president, emphasized that introducing a reliable stablecoin onto XRPL would lead to increased usage and advancement, resulting in a thriving community.
A stablecoin will become available on both Ethereum‘s ERC-20 platform using the Ethereum token standard (ETH), and on the Ripple (XRPL) network.
To boost XRPL’s liquidity, Ripple Labs has formed alliances with some strategic partners in the past, including its subsidiaries Standard Custody and Metaco. Last year, Ripple Labs purchased Metaco, a Swiss company, for $250 million as part of their expansion into institutional crypto custody. The acquisition was announced last year. On the other hand, news about Ripple Labs closing Standard Custody was first hinted at this year.
Read More
Sorry. No data so far.
2024-04-10 15:54