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Ripple will launch a new stablecoin pegged to the U.S. dollar, entering the $150 billion market dominated by Tether and Circle.
The new stablecoin will maintain a one-to-one value with a mix of U.S. dollar assets, including deposits, government bonds, and cash equivalents, which Ripple will hold as reserves.
The company plans to release monthly attestation reports about its reserves to ensure transparency, although it has not specified the auditing firm.
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.
— Ripple (@Ripple) April 4, 2024
That's why later this year we’re launching a stablecoin pegged 1:1 to the USD on the XRP Ledger and Ethereum.…
Initially available in the U.S., Ripple mentions that its stablecoin will expand to other regions, potentially introducing localized versions for European and Asian markets.
In a recent interview with CNBC, Ripple CEO Brad Garlinghouse said that the firm’s decision to launch its stablecoin comes from the stability issues faced by Tether’s USDT and Circle’s USDC.
Notably, USDT’s value dipped below the $1 mark following the terraUSD collapse in 2022, a situation mirrored by USDC in 2023 after the failure of Silicon Valley Bank impacted it.
While Tether has faced scrutiny over the genuine backing of its reserves, Ripple aims to distinguish itself by highlighting its regulatory compliance and licensure in multiple jurisdictions, including New York, Ireland, and Singapore.
Garlinghouse pointed out the regulatory uncertainties surrounding current market leaders, emphasizing Ripple’s regulated status as a critical differentiator in the stablecoin market.