- The stablecoin will be initially issued on the XRP Ledger and the Ethereum blockchain.
- Schwartz thinks the current stablecoin ecosystem is lacking in diversity and robustness.
In an effort to gain market share in the next five years, Ripple, the issuer of XRP, has revealed intentions to establish a stablecoin backed by the US dollar. The goal is to compete with Tether and Circle.
Preceding the release, which details plans for the stablecoin initially issued on the XRP Ledger and the Ethereum blockchain, Ripple chief tech officer David Schwartz remarked.
Schwartz stated:
“It’s funny that the question you ask, we don’t have an answer to yet. What’s the ticker going to be, and what we’re going to call it? You’re just going to have to call it the Ripple stablecoin for now.”
Space for Another Major Participant
For more than a year, Ripple has considered releasing a stablecoin, and Schwartz thinks the current stablecoin ecosystem is lacking in diversity and robustness. According to Schwartz, the current value of the stablecoin industry is $150 billion, and there is space for another major participant.
Dollar deposits, short-term U.S. government Treasurys, and “other cash equivalents” will back Ripple’s stablecoin, which will be fixed at a 1:1 ratio with the dollar. Schwartz anticipated that Ripple will try to compete with the issuer of USD Coin (USDC) by mirroring Circle’s emphasis on compliance.
Ripple will release attestations on a monthly basis, and an independent accounting firm is going to audit the reserve assets. Using the example of Tether’s USDT stablecoin in its early days, Schwartz made analogies to how detractors then voiced concerns about the issuer’s ability to embezzle cash and the veracity of the reserve attestations.
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