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- Ripple plans monthly attestation reports for transparency, though the auditing firm responsible has not been disclosed yet.
- The stablecoin will be backed by U.S. dollar deposits, government bonds, and cash equivalents, ensuring stability.
Ripple, has announced its plan to launch a stablecoin pegged to the U.S. dollar. This move places Ripple in direct competition with the leading stablecoin providers, Tether and Circle, who manage the UDST and USDC tokens, respectively.
The stablecoin market, where Ripple aims to make its mark, currently holds a valuation of $150 billion. Ripple’s stablecoin promises a one-to-one value ratio with the U.S. dollar, backed by a mix of U.S. dollar deposits, government bonds, and cash equivalents.
“Our view is, having pools of liquidity that are native to the XRP ledger, they complement and help grow the XRP ecosystem,” Garlinghouse told CNBC. “In fact, the number one request we get from the XRP community is to launch a USD-backed stablecoin on the XRP Ledger.”
Read more: Ripple’s XRP Outlook: 200% Growth Forecasted Amid Bitcoin Halving Event
Ensuring Stability and Trust
To maintain and promote trust in its stablecoin, Ripple will provide monthly attestation reports. These reports aim to detail the reserves backing the stablecoin, though the company has not yet named the auditing firm responsible for these assessments. Ripple’s initial launch of its stablecoin will take place in the U.S., with potential future expansions to tailor specific stablecoins for markets in Europe and Asia.
This initiative comes in response to past fluctuations experienced by other stablecoins, including Tether’s UDST and Circle’s USDC. Both tokens have previously deviated from their pegged $1 value due to market upheavals and exposures to failing financial entities, raising concerns about their stability and reserve sufficiency.
Facing Regulation and Expanding Market Presence
Brad Garlinghouse, Ripple’s CEO, points out the existing regulatory uncertainties surrounding leading stablecoins in the U.S. He asserts that Ripple’s compliance with regulatory standards in multiple countries, including New York, Ireland, and Singapore, sets it apart as a transparent and reliable option in the stablecoin market.
Garlinghouse emphasizes Ripple’s commitment to its cryptocurrency, XRP, stating that the new stablecoin is intended to complement the XRP ecosystem rather than replace it.
Related: Ripple’s XRPL Breakthrough: Surpasses 87 Million Ledgers Milestone
Furthermore, Garlinghouse touches upon Ripple’s ongoing legal dispute with the U.S. Securities and Exchange Commission (SEC), which began in 2020. The SEC’s lawsuit alleges Ripple conducted illegal sales of XRP. A recent court ruling partially sided with Ripple, stating that XRP sales to institutions were unlawful but did not classify XRP itself as a security.
A Forward-Thinking Approach
Through its venture into the stablecoin market, Ripple seeks to solidify its position in the digital currency field. By launching a U.S. dollar-pegged stablecoin, Ripple aims to challenge the existing stablecoin market leaders by offering a reliable and transparent digital currency option.
With a focus on stability, transparency, and regulatory compliance, Ripple’s entry into the stablecoin market represents a strategic effort to expand its product offerings and enhance the utility of the XRP ecosystem.
The current price of Ripple (XRP-USD) is approximately $0.601035, which is up by $0.022993 or 3.98% as of the latest update.
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