Ripple is getting back to its roots.
The crypto firm is officially launching its dollar-pegged token tomorrow and plunging into the ultra-lucrative $203 billion stablecoin niche.
“As the U.S. moves toward clearer regulations, we expect to see greater adoption of stablecoins like RLUSD,” Brad Garlinghouse, the CEO of Ripple, said in the statement today announcing the debut.
Carving out a business, though, is going to be a challenge. Tether currently commands more than 70% of the market, and brand-name firms like PayPal and Robinhood already launched their stablecoins.
What’s Ripple’s edge?
It’s leaning on its payments network and roster of blue chip financial institutions.
Cross-border payments to the core
Long before punters were flipping memecoins on Ripple’s blockchain, the San Francisco-based company made its name by pitching faster and with cheaper cross-border payments to finance firms.
Its blockchain, the XRP Ledger, and the XRP token — now the fourth-largest cryptocurrency on the market — powered those payments.
Today, its 900 employees sell those blockchain-based payment solutions to firms like MoneyGram, PNC Bank, and Santander.
The stablecoin play is much in the same vein.
After Ripple USD, or RLUSD, launches on exchanges tomorrow, the company said the stablecoin will be integrated into its payments network, Ripple Payments, early in 2025.
The network has recorded over $70 billion in volume. The firm says the network covers over 90% of the daily foreign exchange market across over 200 institutions.
This just in…we have final approval from @NYDFS for $RLUSD! Exchange and partner listings will be live soon – and reminder: when RLUSD is live, you’ll hear it from @Ripple first.
— Brad Garlinghouse (@bgarlinghouse) December 10, 2024
The company has also added two former banking officials to advise the stablecoin rollout.
Raghuram Rajan is the former governor of the Reserve Bank of India, and Kenneth Montgomery is the former first vice president and chief operating officer of the Federal Reserve Bank of Boston.
Customers may opt for the stablecoin when sending money between certain countries or XRP when sending money between other countries, Eric van Miltenburg, senior vice president of strategic initiatives at Ripple, told DL News in April.
RLUSD is available for users in the Middle East, the United Kingdom, the Americas, and the Asia-Pacific. The stablecoin is not available in Europe.
Ripple buys the highs
The stablecoin market has boomed this year.
The total value of all stablecoins on the market has risen 56% since January, according to DefiLlama. It’s also been a major boon for leading issuers like Tether.
Stablecoins are cryptocurrencies pegged to the price of a national currency, like the dollar or the euro. Stablecoins like RLUSD, Tether’s USDT, and Circle’s USDC are backed by cash and cash equivalents such as US Treasuries.
Those Treasuries have been a boon for stablecoin issues.
Tether posted first-half treasury holdings of treasury holdings generated $5.2 billion.
Sums like that aren’t lost on Ripple. After all, RLUSD will also be backed by treasuries.
“We see it as a great business opportunity,” said Miltenberg.
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.
