Thanks to some limitations imposed by Markets in Crypto Assets Regulation (MiCA), Ripple, a U.S. fintech decacorn, might have no choice but to issue own stablecoin pegged to Euro (EUR). Also, community enthusiasts are guessing whether XRP might be useful in addressing new roadblocks.
Ripple might need own EUR stablecoin, MiCA to blame: Community
U.S. crypto heavyweight Ripple might be forced to issue its own stablecoin pegged to EUR, together with some of its competitors in the cross-border remittances segment. Such suggestions were shared by XRP and Ripple community activist Crypto Eri (@sentosumosaba in X) with her 240,000 followers.
🤨Watch for more EUR StablecoinsI imagine Ripple & others will likely issue a EUR stablecoin because MiCA introduced a cap on stablecoins not tied to official EU currency (ie: USD pegged) when exchanged. Limits set at 1M transactions per day, and or EUR 200M trading vol per day.…
— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) July 20, 2024
New stablecoin design ideas should be attributed to the limitations envisaged by Markets in Crypto Assets Regulation (MiCA) regulations package. It not only limits the number in non-EUR stablecoins by 1 million per day, but also imposes a €200 million cap.
As such, Ripple's potential USD-pegged stablecoin will reach these limits shortly, and it likely will not be enough to serve the demand in cross-border remittances.
Another Ripple/XRP community speaker @WKahneman highlights that these limits are "too low" for Ripple's businesses and guesses whether the XRP coin can find its role in the new design:
Wow that is a seemingly low trading volume. They are forcing large co's to use/create a EUR stablecoin. Makes sense Ripple would offer one. I wonder if it also creates a situation where XRPL/XRP capabilities are more in demand?
It should also be noted that Ripple is contributing to Digital Euro Association (DEA) as a supporting partner to provide consulting and infrastructure assistance to ECB stablecoin initiatives.
Ripple's stablecoin ambitions taking shape in 2024
Right now, EUR-pegged stablecoins account for a tiny fraction of the segment. For instance, the largest Euro stablecoin Stasis Euro sees its capitalization sitting at $137 million in equivalent,
Tether's and Circle's EUR-centric products boast a $70 million market cap combined, which is almost 2,000x lower compared to their USD-pegged assets.
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As covered by U.Today previously, Ripple announced the launch of its USD-pegged stablecoin last April. The new asset will be using the ticker RLUSD and will be backed by cash and its equivalents.
Ripple's Monica Long stressed that the upcoming asset will not be competing with XRP as a cross-border transfers tool, but will be "complementing" it instead.
The XRP price is up by 5.9% in the last 24 hours; the coin touched a local high over $0.60.
