Quick take:
- Ripple CTO David Schwartz the Stablecoin launch seemed like a good opportunity amid the surging popularity.
- The toke will be 100% backed by US dollar, SU short-term treasuries and cash equivalents.
- The announcement comes just as Delaware-based venture firm VanEck launched Agora to disrupt the stablecoin market.
Ripple is joining the stablecoin business amid the surging interest in the market. Explaining its decision to join the industry, the XRP Ledger creator said in a statement: “The stablecoin market is over $150 billion today and is forecasted to exceed $2.8 trillion by 2028. There’s clear demand for stablecoins that deliver trust, stability and utility,” CoinDesk reported.
According to the announcement, the Ripple stablecoin is scheduled for deployment on Ripple’s institutional-grade XRP Ledger and Ethereum later this year. It will be 100% backed by the US dollar, US short-term treasuries and cash equivalents. The token will be based on the ERC-20 standard, which requires nine scripting functions and two events to be used when creating a fungible token on a smart contract.
Ripple’s stablecoin announcement comes at a time when the industry is experiencing a rising interest, with crypto traders looking to hedge their portfolios against the more volatile digital assets.
Brad Garlinghouse, Ripple CEO lauded the decision as a natural step for Ripple to continue bridging the gap between traditional finance and crypto.
“Institutions entering this space are finding success by partnering with compliant, crypto-native players and Ripple’s track record and resiliency speaks for itself, as we launch new products and acquire companies through multiple market cycles,” Garlinghouse added.
Earlier this week, Agora, a stablecoin entity co-founded by Nick Van Eck with crypto veterans Drake Evans and Joe McGrady raised $12 million in a seed round led by Dragonfly, with the co-founders stating that there is still room for newcomers in the space.
Tether’s USDT and Circle’s USDC dominate the market with market caps of $106 billion and $32 billion, respectively.
However, with a projected market value of over $2.8 trillion by 2028, it explains why Ripple and Agora are joining the stablecoin business whilst there is still much room for newcomers.
But Ripple wants to be more strategic about its involvement in the space. “What we think is going to be our differentiator is going to be the fact that the assets are going to be in dollars, Treasuries – rock solid,” Ripple CTO David Schwartz told CoinDesk in an interview. “We’re not trying to juice the last couple of decimal points out of this. We’re looking to conquer the market and be in it for the long term.”
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