Ripple to Launch USD-Backed Stablecoin on Ethereum and XRP Ledger

Fintech firm Ripple announced on Thursday that it plans to launch its own stablecoin pegged to the U.S. dollar across the Ethereum and XRP Ledger blockchains.

Set to roll out later this year, an as-yet-unnamed crypto stablecoin will be fully backed by U.S. dollars, short-term U.S. government treasuries, and "other cash equivalents," according to a release. Ripple says it will provide monthly attestations of its holdings that back the stablecoin, which will be audited by a third-party accounting firm.

Ripple Chief Technology Officer David Schwartz told Decrypt that the firm believes the current $150 billion stablecoin market is poised to explode in the coming years to become a multi-trillion-dollar market. They see a clear opportunity in that space.

"We think we're uniquely positioned to have a competitive entry in that market," he said. "We have our presence both on the institutional side with our payments product, and on the XRP Ledger side, we have some entry into the DeFi section of the space. Those are kind of the two big buckets in which stablecoins are being used today."

It's a space currently dominated by Tether (USDT) and USDC, both of which Ripple—the XRP-powered crypto payments platform and enterprise blockchain provider—has been watching closely for years.

"We have a strong balance sheet. We've been around for a very long time," Schwartz explained. "We have fantastic compliance—we've been doing compliance for payments for almost eight years now. We have an impressive suite of licenses."

Schwartz said that Ripple decided that there "has to be a U.S. jurisdictional nexus" around its stablecoin and added that the "easier thing to do would be kind of like what Tether did." Tether is based in the British Virgin Islands.