Ripple prepares a stablecoin pegged to the US dollar
A stablecoin designed to compete with market giants Tether, with its USDT now capitalized at more than $100 billion, and Circle, with its USDC which is approaching $33 billion: this is what Brad Garlinghouse announced , the CEO of Ripple, in an interview .
The company issuing XRP intends to launch a stablecoin backed by the dollar, which will be launched on the Ethereum environment and on the Ripple blockchain in the form of an ERC-20 token . The stablecoin, whose name has not yet been revealed, is expected to be released later this year.
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According to Monica Long, the president of Ripple, the issuance of this stablecoin is above all part of a desire for development for the company and to open new doors in the ecosystem beyond its historic XRP token.
Issuing our stablecoin on XRP Ledger and Ethereum will serve as a critical entry point to unlock new opportunities for institutional and DeFi use cases across multiple ecosystems.
Ripple’s stablecoin is expected to meet the needs of small and medium-sized businesses, as well as non-bank financial institutions, such as payment companies. The company is banking on its compliance , more advanced than that of Tether according to it, to take share in the stablecoin market (even though it is already well saturated).
Companies issuing stablecoins, which represent the price of a currency (in this case the US dollar), must have money reserves greater than the capitalization of the stablecoin in question so that the latter is not backed by wind. .
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Regarding Ripple’s future stablecoin, it will be backed by cash, short-term US Treasury bills and other cash equivalents . Ripple’s reserves will be regularly audited by an accounting firm, according to Brad Garlinghouse. The cabinet in question has not yet been chosen.
As part of an interview with our colleagues at The Block, David Schwartz, Ripple’s CTO, indicated that the company would have liked to launch a stablecoin sooner , but that economic factors had led them to be somewhat cautious. The increase in interest rates would have changed the situation and made the market more attractive, according to him.Buy cryptos on eToroInvesting in cryptocurrencies is offered by eToro (Europe) Ltd as a PSAN registered with the AMF. Investing in cryptoassets is very volatile. There is no consumer protection. Investing is risky (
Source : Bloomberg