Ripple will launch US dollar stablecoin and aims to compete with USDT and USDC

XRP issuer Ripple has announced plans to launch a US dollar-backed stablecoin and hopes to compete with Circle and Tether for market share over the next five years.

Ripple's stablecoin will be pegged at a 1:1 ratio to the US dollar and the company plans to back the tokens with US dollar deposits, short-term US government treasury bonds and “other cash equivalents”. Schwartz said Ripple would try to emulate Circle's focus on compliance and would likely aim to compete with the issuer (USDC):

“Our angle will be very much ‘compliance first’. We are very transparent about how assets are collateralized, so we will be competing directly with USDC.”

“We want to gain market share. We’re not looking for a few extra decimal points by taking risks with other people’s money,” Schwartz added when asked about Ripple’s plans to support the stablecoin with dollar deposits, US Treasury bonds and cash equivalents.

Circle's transparency page describes a slight surplus in reserve assets backing circulating USDC tokens. Source: Circle.

Reserve assets will 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 token, where critics often sounded the alarm about the issuer's potential to steal funds and the credibility of its reserve attestations.

“Initially when Tether was launched, a big concern was whether these guys would run away with all the money, because they are very incentivized to do that. Then after a while, 'You think, wait a minute, these guys have a long-term business.