Ripple to issue stablecoin backed 100% by cash equivalents
A third party accounting firm will audit these reserves and Ripple will publish monthly attestations
Ripple CEO Brad Garlinghouse | Ben Solomon Photo LLC for Blockworks
Digital payments network Ripple will launch a USD-pegged stablecoin that will be backed 100% by US dollar deposits, short-term US Treasurys and other cash equivalents.
According to Ripple, a third-party accounting firm will audit the reserves for these assets, and Ripple will publish monthly attestations.
Stablecoins are the most popular real-world assets (RWAs) today. Particularly, USD-pegged stablecoins are some of the most widely adopted tokens. DeFiLama data shows that the stablecoin market is worth almost $152 billion, with Tether’s USDT dominating almost 70% of the entire market share. EURO-pegged stablecoins on the other hand, have gained much less interest, having a total value of roughly $600 million.
Read more: Stablecoins remain the silver lining for RWAs: Report
Entering the stablecoin market with a new USD-pegged token is a “natural step for Ripple,” the company’s CEO Brad Garlinghouse remarked in a press release reviewed by Blockworks.
“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 said. “This move is also monumental for the XRP Ledger community, driving more use cases, liquidity and opportunities for developers and users.”
Ripple President Monica Long believes introducing a new stablecoin will likely drive further adoption into the XRPL ecosystem. The stablecoin will be available to users on XRP Ledger and Ethereum, and Ripple notes that it has plans to expand the token to additional blockchains and protocols in the future.
Earlier last week, the US Securities and Exchange Commission demanded that Ripple should pay $2 billion in fines and penalties. Garlinghouse noted that this was unprecedented, writing on X that there had been “no allegations (let alone findings) of fraud or recklessness.”
Read more: SEC seeks $1.9B from Ripple in proposed final judgment
Ripple’s battle with the SEC began in 2020 after the regulator accused Ripple Labs of offering unregistered securities worth $1.3 billion, with the US federal judge partially siding with Ripple in the case.
Ripple’s portfolio continues to grow with regulatory compliance in mind. The company notes that it and its subsidiaries currently hold various licenses nationwide, including the New York BitLicense, and nearly 40 money transmitter licenses across the US.
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