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Ripple CEO Brad Garlinghouse expresses confidence in the company’s upcoming stablecoin prospects, including the likelihood for the token to gain a significant share of the stablecoin market.
In a viral video making rounds in the XRP community, Garlinghouse said that even though Ripple has not revealed the name of its upcoming stablecoin, he is confident that the asset could gain dominance in the stablecoin market.
“I’m very optimistic that there is a lot of market share there for it [stablecoin]. There is a lot of growth [for the upcoming stablecoin], so I’m excited,” Garlinghouse remarked.
Garlinghouse’s confidence stems from Ripple’s strong financial position, which would ensure that the stablecoin remains pegged to the U.S. dollar.
👑🎯 RIPPLE´S STABLECOIN IS SUPERIOR TO #USDC AND #USDT ➡️ REMEMBER WHEN #USDC DEPPEGED (SEE POST BELOW) – #CIRCLE COULDN´T MOVE USDC WHEN THEY STEPPED IN ➡️ "THAT´S PARTLY BECAUSE I THINK CIRCLE DOESN´T HAVE A BIG BALANCE SHEET" ➡️ RIPPLE HAS $20 – $30 BILLION DOLLARS IN… https://t.co/7C1FnEXbJf pic.twitter.com/cu9fwEdGWy
— XRP DROPZ (@DROPZXRP) May 31, 2024
Circle’s USDC Saga
Notably, the Ripple CEO recounted when Circle’s USDC stablecoin lost its peg to the dollar and how difficult it was for the company to restore the asset’s $1 peg.
Recall that USDC lost its $1 peg last year, crashing to an all-time low of $0.87 on March 11. The stablecoin lost the peg following the collapse of Silicon Valley Bank (SVB), which manages 25% of USDC’s reserve.
However, Circle assured investors that it remains committed to maintaining the $1 peg and will cover any shortfall if the bank fails to return 100% of USDC’s reserve deposits. Despite Circle’s assurance, USDC did not repeg immediately to $1. Instead, the stablecoin re-pegged completely to $1 after a few days.
Ripple Has a Strong Balance Sheet Than Circle
Reacting, Garlinghouse attributed the difficulty restoring USDC’s $1 peg to Circle’s low balance sheet. The Ripple CEO emphasized that “USDC didn’t move” despite Circle assuring investors of its plans to “step in” and possibly cover any shortfall.
“[USDC didn’t move] partly because I think Circle does not have a big balance sheet,” he stated.
Garlinghouse later contrasts Circle’s position with Ripple’s, noting that if the latter had made a similar promise at the time, USDC would have regained its $1 peg. He revealed that Ripple has a large balance sheet of $20 billion to $30 billion behind it. Hence, it can easily repeg the stablecoin to $1.
Garlinghouse’s comment suggests that Ripple has more financial backing than Circle and could potentially intervene and restore the dollar peg of its upcoming stablecoin if it faces similar issues.
Garlinghouse Confident About Ripple Stablecoin Amid USDC and USDT Threats
It bears mentioning that the $161 billion stablecoin market is dominated by Tether (USDT), which boasts a valuation of $111.95 billion. USDC is the second-biggest stablecoin, with a market cap of $32.34 billion.
Market watchers believe Ripple’s upcoming stablecoin will face stern competition from USDC and USDT when it launches later this year on the XRP Ledger (XRPL) and Ethereum networks.
Nonetheless, Garlinghouse is confident that the upcoming stablecoin would gain a significant share of the stablecoin market, which is projected to reach a $2.8 trillion valuation by 2028.