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Ahead of the issuance of Ripple’s U.S.-dollar pegged stablecoin, the company has revealed some notable trends in the industry. The stablecoin’s design combines blockchain technology's benefits with trust in traditional currencies.
Given their fast adoption globally, Ripple appears ready to leverage the growing trends in stablecoin usage. The company believes stablecoins have the potential to reshape the world’s finances and has highlighted some crucial trends.
Is stablecoin gaining acceptance?
For context, stablecoins are digital currencies pegged to a fiat currency like the U.S. dollar (USD). This aims to eliminate some people's fears about price volatility. Stablecoins have gained traction as businesses favor blockchain technology for its speed, security and transparency.
Data shows that in 2022, $6.87 trillion of fiat-backed stablecoins were transacted in digital payments. This surpasses familiar traditional payment networks like PayPal and MasterCard and highlights the growing potential of stablecoins in payment ecosystems.
Meanwhile, since 2018, the number of Americans who did not use cash for purchases has risen to 41% from 29%. This has prompted business owners to switch to stablecoin payments, as customers prefer its faster checkouts and better security. Additionally, the lack of middlemen means decreased costs for business owners.
Regulatory momentum for stablecoins
According to Ripple, the upcoming RLUSD stablecoin will maintain a constant value of one U.S. dollar and be redeemable 1:1 for USD. The RLUSD will be issued on both the XRP Ledger and Ethereum blockchain. It will enable instant payments, and users can easily convert between fiat and stablecoins.
Ripple says it will deploy smart contracts to enhance programmable finance and open new revenue streams for payment providers.
The company assures us that RLUSD was designed with regulatory compliance in mind. This is critical given that regulatory issues could raise concerns about users' willingness to adopt the payment method. In the U.S., the Clarity of Payments Stablecoin Act could unlock even more stablecoin innovation.