Ripple expects the stablecoin market to surpass $2 trillion by 2028 and aims to compete with Circle’s USDC and Tether USDT.
XRP issuer Ripple has announced plans to launch a U.S. dollar-backed stablecoin and hopes to compete with Circle and Tether for a slice of the market share over the next five years.
Cointelegraph spoke to Ripple chief technology officer David Schwartz ahead of the announcement, which outlines plans for the stablecoin that will initially be issued on the XRP Ledger and Ethereum blockchains.
“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,” Schwartz said during a video call.
Ripple has been toying with the idea of launching a stablecoin for over a year and Schwartz believes the existing stablecoin ecosystem is not as diverse and robust as it could be. Pinning the stablecoin market’s current value at $150 billion, Schwartz said there’s room for another big player:
“We think it will be over $2 trillion by 2028, and there’s only two market leaders. We don’t think it’s a winner-take-all-all ecosystem, particularly on the DeFi side.”
Ripple’s stablecoin will be pegged at a 1:1 ratio with the U.S. dollar and the company plans to back the tokens with U.S. dollar deposits, short-term U.S. government treasuries and “other cash equivalents”. Schwartz said that Ripple would look to emulate Circle’s focus on compliance and likely aim to compete against the
USDC
tickers down
$1.00
issuer:
“Our angle is going to be very ‘compliance-first’. We’re very transparent about how the assets are backed so we’re kind of going to be directly competing against USDC.”
“We’re looking to grab market share.
We’re not looking to finesse a couple of extra decimal points by taking risks with other people’s money,” Schwartz added when queried over Ripple’s plans to back the stablecoin with dollar deposits, U.S. treasury bonds and cash equivalents.
إقرأ أيضا:Bahsegel (719)The reserve assets are set to be audited by a third-party accounting firm, and Ripple will publish monthly attestations. Schwartz drew comparisons to the early days of Tether’s
USDT
tickers down
$1.00
token, where critics often sounded the alarm over the potential of the issuer to steal funds and the credibility of its reserve attestations.
“Initially when Tether first launched, a big concern was whether these guys would run off with all the money because they’re very incentivized to do that. Then, after a while, ‘you’re like, wait a minute, these guys have a long-term business,’” Schwartz said.