Godfrey Benjamin
American blockchain payments firm Ripple Labs Inc. has announced its plans to launch a stablecoin asset that will rival current dominant alternatives in the market.
Ripple Labs Stablecoin and Push for Transparency
As the firm noted, its stablecoin will change the game as it concerns transparency concerning its reserves. As the firm noted, the stablecoin will be pegged on a 1:1 ratio with the United States Dollar and its reserves will hinge on multiple assets. Some of these assets as it outlined include US dollar deposits, short-term US government treasuries, and other cash equivalents.
To bolster the transparency game for the stablecoin, Ripple Labs said it will conduct a thorough audit by consulting a third party and it will publish monthly attestations right from launch.
“This is a natural step for Ripple to continue bridging the gap between traditional finance and crypto,” said Brad Garlinghouse, Ripple CEO. “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. This move is also monumental for the XRP Ledger community, driving more use cases, liquidity and opportunities for developers and users.”
As a payments firm, Ripple Labs has faced some forms of restrictions in its ability to innovate owing to the long-drawn lawsuit with the US Securities and Exchange Commission (SEC). However, the partial victory bagged last July pushed the firm into a new era. The proposed stablecoin will further relieve the strain on XRP, its associated digital currency that it has used as a payment token to power its On-Demand Liquidity (ODL) service for years.
Multi-Blockchain Support
According to the announcement, the Ripple Labs Stablecoin will be hosted on the XRP Ledger (XRPL) at launch. To push its its decentralization agenda, the firm said it will also host the stablecoin on Ethereum (ETH) with plans to expand this reach to other protocols over time.
The stablecoin market is an essential one for the blockchain ecosystem. With Tether (USDT) and USD Coin (USDC) dominating with more than 106 billion and 32.8 billion in circulating units respectively, Ripple believes its alternative stablecoin has the enterprise links to gain a huge market share from Tether.
Ripple highlighted the benefits adopters of its stablecoin will gain and this includes but is not limited to multichain compatibility, liquidity on DEX, and enterprise-grade technologies.
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