The community XRP has expressed some concerns and questions after the Ripple recently announced a plan to introduce a new stablecoin. According to the company's planning, the new stablecoin will be pegged to the US dollar.
Ripple Labs, a prominent blockchain developer of the cryptocurrency XRP, has announced ambitious plans to launch a new stablecoin pegged to the US dollar at a 1:1 ratio. This initiative marks Ripple's entry into the competitive stablecoins market, which currently boasts a valuation of around US$150 billion.
Lawyer and cryptocurrency enthusiast Bill Morgan recently shared his concerns, questioning the announcement of the upcoming stablecoin launch released by Ripple CEO Brad Garlinghouse. Sharing Garlinghouse's announcement, Morgan questioned the usefulness of Ripple's native XRP token, stating:
“You say you will use the new stablecoin alongside XRP in crypto-enabled payments. I assumed that XRP was sufficient on its own as a bridge in payments, so how are they used together or why do they need to be used together. Are there options to use as a payment bridge and do customers choose one or the other? Does this decision show that Ripple recognizes more customer demand for stablecoins than XRP as a bridge currency in cross-border payments?”
You say you will use the new stablecoin together with XRP in crypto enabled payments. I have assumed XRP was sufficient of itself as a bridge in payments so how are they used together or why do they need to be used together. Are they options to use as the payment bridge and… https://t.co/PLdB4H3cUE
— bill morgan (@belisarius2020) April 4, 2024
Morgan's questions provided the basis for the involvement of other members of the XRP community, who are divided about the new development in the ecosystem.
Ripple announces $150 billion USD-pegged stablecoin
Ripple Labs announced, on April 4, its plans to launch a new stablecoin pegged to the US dollar in a 1:1 ratio. According to statements made last Thursday, Ripple assures that the reserves of the new stablecoin will be made up of a combination of deposits in US dollars, short-term US Treasury bonds, among other cash equivalents, the details of which remain confidential. A third auditing firm will be responsible for inspecting these assets, with Ripple committing to offering monthly certifications to promote transparency.
Ripple's entry into this sector is not only notable for its growth potential – with projections pointing to a $2,8 trillion market by 2028 – but also for what it represents for the XRP Ledger (XRPL) ecosystem. Brad Garlinghouse, CEO of Ripple, highlighted the vital role of partnerships with crypto-native and regulated entities for prosperity in this new territory. Garlinghouse emphasized Ripple's commitment to innovation and expansion, citing the company's track record of launching new products and acquiring businesses across various market cycles.
