Ripple, a provider of enterprise blockchain and crypto solutions, has revealed plans to introduce a stablecoin pegged 1:1 to the US dollar (USD).
The asset will be backed entirely by US dollar deposits, short-term US government treasuries, and other cash equivalents.
Ripple CEO Confident on Launch
According to an April 4 press release, these reserve assets would undergo audits by a third-party accounting firm, with monthly attestations to be published for public scrutiny.
Brad Garlinghouse, Ripple’s CEO, expressed confidence in the move, stating, “This is a natural step for Ripple to continue bridging the gap between traditional finance and crypto.”
The exec also highlighted the increasing success of institutions partnering with compliant, crypto-native players, citing Ripple’s track record and resilience through various market cycles.
He mentions the broader implications of the stablecoin launch for the crypto ecosystem. It will initially be available on the XRP Ledger (XRPL) and Ethereum (ETH) blockchains, with plans for expansion to additional networks and decentralized finance (DeFi) protocols in the future.
Monica Long, Ripple’s President, emphasized the transformative impact of issuing the stablecoin on the XRP Ledger. “Bringing a trusted stablecoin onto XRPL will drive more adoption and development, contributing to a vibrant ecosystem,” Long said.
Key Benefits
The benefits of Ripple’s stablecoin include its enterprise-grade nature, compliance-first mindset, liquidity on the Decentralized Exchange (DEX), transparent reserve, and multichain compatibility.
Specializing in blockchain solutions for financial institutions and enterprises, Ripple will integrate both XRP and its stablecoin into its payment system, meeting the growing demand for such payouts in emerging markets.
Ripple’s stablecoin will boost liquidity on the Decentralized Exchange (DEX) by providing a credible asset for trading on the XRPL. This move benefits users, developers, and applications by facilitating low-cost, quick settlements worldwide.
Ripple prioritizes regulatory compliance shown through its range of licenses globally, including a New York BitLicense and multiple money transmitter licenses in the US. The recent acquisition of Standard Custody is also a part of its regulatory efforts.
It will also be backed by a 1:1 reserve of cash and cash equivalents, ensuring transparency and reliability with regular monthly attestations of these being published once the stablecoin is launched.
The stablecoin will be issued on both the XRP Ledger and Ethereum networks, using XRPL native functionality and ERC20 token standards. This compatibility allows developers on both networks to incorporate the stablecoin, enabling users to transact securely across chains.