Ripple Unveils Stablecoin Tied to US Dollar, Sets Sights on USDT and USDC Competition

Ripple, the issuer of XRP, has revealed its plans to launch a stablecoin backed by the United States dollar (USD), with the aim of competing with Circle and Tether in the stablecoin market. In an interview with Cointelegraph, Ripple’s Chief Technology Officer, David Schwartz, discussed the company’s plans for the stablecoin, which will initially be issued on the XRP Ledger and the Ethereum blockchain. While the ticker symbol and name for the stablecoin have not yet been determined, Schwartz referred to it as the “Ripple stablecoin” for now. Ripple has been considering the launch of a stablecoin for over a year, with Schwartz believing that the current stablecoin ecosystem is lacking in diversity and strength. He stated that there is room for another major player in the market, which is currently valued at $150 billion. The stablecoin will be pegged to the USD at a 1:1 ratio and will be backed by USD deposits, short-term US government Treasurys, and other cash equivalents. Ripple aims to emulate Circle’s compliance-focused approach and compete with the issuer of USD Coin (USDC). Schwartz emphasized that Ripple’s goal is to gain market share rather than take unnecessary risks. The company plans to have the reserve assets audited by a third-party accounting firm and will publish monthly attestations. Schwartz compared the concerns surrounding the launch of Tether’s stablecoin to Ripple’s stablecoin launch, highlighting the importance of credibility and a strong balance sheet. Despite the focus on the stablecoin offering, Ripple will continue to position XRP as the token for its payment network catering to financial institutions. Schwartz explained that while XRP is used for transparent payments, there are markets where non-bank payment companies cannot utilize it or supplement liquidity. The introduction of a Ripple stablecoin will complement the recently launched automated market maker and provide liquidity and capture volatility and arbitrage opportunities between multiple assets.