Amid the ongoing legal dispute with the Securities and Exchange Commission (SEC), Ripple is intensifying its focus on its cryptocurrency portfolio by announcing plans to launch a stablecoin.
The stablecoin, scheduled for release later in 2024, will be supported by U.S. dollar deposits, short-term U.S. government Treasuries, and other cash equivalents, CoinDesk reported on April 4.
According to the company, it aims to initially deploy the stablecoin on both the XRP Ledger and the Ethereum (ETH) blockchain, leveraging Ethereum’s ERC-20 token standard. The token would primarily target enterprise customers and banking institutions.
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“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. 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,” said Ripple CTO David Schwartz.
Furthermore, Schwartz stressed that transparency, a historical point of contention for stablecoin issuers, would be a primary focus for Ripple as it introduces its new token.
Given Ripple’s current entanglement in a legal dispute with the SEC, the company acknowledged that part of its rationale for its actions was opportunistic, recognizing the growing market landscape. Indeed, Ripple’s stablecoin will face competition from established players like Tether’s USDT and Circle’s USDC.
Impact on Ripple and XRP
Schwartz suggested introducing the new stablecoin, which could revamp the decentralized finance (DeFi) ecosystem of the XRP Ledger. Despite having a decentralized exchange (DEX), the ledger’s usage remains relatively subdued compared to other chains.
Attention will also be drawn to how the stablecoin might impact other Ripple products, particularly the platform’s native XRP token. Despite a court ruling declaring XRP not a security, its price has remained stagnant, with some attributing this to the ongoing legal case.
It is worth noting that the potential rollout of a Ripple stablecoin could positively impact XRP by increasing its utility and liquidity and potentially bolstering market confidence.
In the meantime, by press time, XRP was trading at $0.59, having experienced a nearly 3% increase in the last 24 hours. The asset’s weekly chart indicates consolidation, with a slight decrease of above 3% over the past seven days.
