Ripple has announced that it will launch a US dollar-backed stablecoin later this year. The company behind the cryptocurrency XRP, founded in 2012, focuses on using blockchain technology to make cross-border payments faster, cheaper, and more efficient.
XRP
XRP is used within the Ripple network to provide liquidity and to act as a bridge currency between different currencies, allowing for direct conversion without the need for traditional banking intermediaries. The goal of Ripple and the use of XRP is to improve and accelerate existing payment infrastructures, especially for international transfers.
Stablecoin
However, the company has a new initiative, led by Ripple’s Chief Technology Officer David Schwartz, aimed at competing with existing USD-pegged stablecoins such as USDT and USDC.
Schwartz acknowledges the need for a stable and reliable stablecoin for both institutional and DeFi users. He emphasizes the importance of diversification and choice in the market, and believes that Ripple, with its compliance-oriented approach, is well-positioned to make this new stablecoin successful.
Future plans
The stablecoin will initially be available only on the XRP Ledger and Ethereum, according to Ripple President Monica Long. However, the company plans to expand to other blockchains and DeFi protocols to further stimulate adoption, which is naturally positive for Ripple's position within the crypto market. It will be backed by "USD deposits, short-term US treasury bonds, and other cash equivalents," with regular audits conducted by a third party.
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