Ripple Wants to Go Head-to-Head with Tether and USDC: Can It?

Ripple CEO Brad Garlinghouse believes a stablecoin is a natural fit for Ripple, complementing their existing XRP cross-border payment solutions.

Brad Garlinghouse ready to fight some more.
Created by Kornelija Poderskytė from DailyCoin
  • Ripple has highlighted the importance of stablecoins for cross-border payments, volatility hedging, and liquidity.
  • Ripple has set its sights on capturing a significant share of the rapidly growing stablecoin market.
  • Ripple will launch its stablecoin on both XRPL and Ethereum blockchains to attract a wider user base.

Ripple CEO Brad Garlinghouse, speaking at Paris Blockchain Week, highlighted the growing importance of stablecoins for facilitating cross-border payments, hedging against volatility, and enhancing liquidity. He believes a stablecoin will be a natural fit for Ripple, complementing their existing XRP cross-border payment solutions.

Ripple Announces Launch of USD-Backed Stablecoin

While acknowledging the success of existing stablecoins like Tether (USDT) and USD Coin (USDC), Garlinghouse sees an opportunity for Ripple to capture a significant share of the rapidly growing stablecoin market, currently valued at $150 billion. Ripple anticipates the market to reach $3 trillion within the next five years.

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“We plan to leverage both XRP and the stablecoin in its payment solution to improve the customer experience further and serve as the first enterprise use-case of the asset at scale,” stated Ripple. They also acknowledged the demand from their customers in emerging markets for stablecoin payouts.

The primary driver for Ripple’s stablecoin appears to be boosting liquidity on the XRPL network. Many Layer-1 blockchains have witnessed significant liquidity growth following the launch of a stablecoin. By introducing their own stablecoin, Ripple hopes to replicate this success and foster a more vibrant XRPL ecosystem.

Ripple to Take on USDC and USDT

Leveraging their established position and focus on regulatory compliance, Ripple aims to position their stablecoin as a strong competitor to USDT and USDC. “Bringing a trusted stablecoin onto XRPL will drive more adoption and development, contributing to a vibrant ecosystem,” stated Monica Long, Ripple President.

The stablecoin will be launched on both the XRPL network and the Ethereum (ETH) blockchain using the ERC-20 token standard. This dual-chain approach could potentially attract a wider user base.

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While Ripple seeks to expand its presence in the crypto market with the stablecoin, it’s worth noting the recent closure of their custodial service, Standard Custody. However, their strategic partnerships with other firms like Metaco suggest a continued commitment to the institutional crypto custody space.

On the Flipside

  • The market is already saturated with established players with significant brand recognition and liquidity. Capturing market share will be challenging.
  • Ripple is currently embroiled in a legal battle with the SEC regarding the classification of XRP as a security. 

Why This Matters

Ripple’s entry into the stablecoin market, with a focus on both regulatory compliance and a dual-chain launch, could shake up the current dominance of USDT and USDC. This has the potential to benefit Ripple by boosting XRPL adoption and liquidity and contribute to a more robust and competitive stablecoin landscape for the entire crypto ecosystem.

This article explores Ripple CEO Brad Garlinghouse’s prediction of a $5 trillion crypto market by the end of 2024:
Ripple CEO’s Audacious $5T Forecast: Peril or Prophecy?

This article explores the features of the coin and Ripple’s reasons for entering the stablecoin market:
Ripple Unveils USD Stablecoin: What Makes It Different?

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.