Expert Reveals Why Ripple Wants To Launch Stablecoin Now
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USD-pegged stablecoins are surging, nearing their all-time high at $165B! Ethena’s USDe stablecoin and newcomers like PayPal and Ripple are shaking up the competitive landscape. With Ripple forecasting a $2.8T market by 2028, the stablecoin race is heating up!
Here’s the reality of Ripple’s Decision to Launch a Stablecoin
Legal expert and pro-XRP advocate Fred Rispoli recently shed light on Ripple’s decision to launch a dollar-backed stablecoin in the United States later this year. According to Rispoli, Ripple’s primary motive behind introducing the stablecoin is to facilitate U.S.-based customers’ utilization of its ODL solution, now known as Ripple Payments, for cross-border transactions.
Rispoli’s statement suggests that instead of relying on XRP, U.S.-based customers can utilize Ripple’s forthcoming stablecoin when conducting transactions through ODL. This move comes amidst Ripple’s ongoing legal battle with the SEC, where the company recently filed its opposition to the SEC’s request for substantial fines and penalties.
Analyzing Ripple’s latest legal filing, Rispoli expressed confidence that Ripple is well-positioned to win in the remedies stage of the lawsuit. However, he acknowledged potential challenges that could block Ripple’s success.
Considering the regulatory problems, Ripple has shifted most of its ODL operations offshore, particularly to Singapore, where it obtained an in-principle approval last year. To cater to U.S.-based customers, Ripple has opted to introduce a stablecoin, enabling users in the region to utilize it instead of XRP for payments.
Traditionally, ODL transactions utilize XRP as a bridge asset between two fiat currencies for seamless cross-border settlements. However, Ripple’s stablecoin initiative aims to provide an alternative payment option for U.S.-based ODL clients. Ripple’s stablecoin will initially launch on the XRP Ledger and Ethereum, with plans for integration into other blockchains in the future.
Ripping the Stablecoin Interest
With this move, Ripple aims to tap into the $150 billion stablecoin market, catering to institutional players and the broader DeFi sector. By integrating stablecoin into its payments platform, Ripple seeks to offer U.S.-based ODL clients a versatile payment solution for cross-border transactions.
The USD-pegged stablecoin market, long dominated by Tether’s USDT and Circle’s USDC, is rising in supply and choice. USDT leads with a 70% market share, according to DeFiLlama. With a long way to go, Ripple wants to create a “compliance-first” and trustworthy stablecoin to catch up to top performers Tether and Circle.
To retain its institutional and government clients, Ripple needs a compatible stablecoin. Additionally, Ripple will have competition in compliance-first stablecoins. While Ripple launched their stablecoin, Agora launched its fully collateralized stablecoin, whose reserve fund will be administered by Van Eck.
