❗️RIPPLE #XRP news in Brief 🗞‼️

**Ripple** plans to launch a **stablecoin** backed by the **US dollar** to compete with heavyweights such as **Tether (USDT)** and **Circle (USDC)**⁴. Here are the details on Ripple's stablecoin and its impact on the **XRP** currency:

1. **What is a stablecoin?**

- A **stablecoin** is a cryptocurrency whose value is **indexed** to a fiat currency (like the dollar or the euro) or to a metal (like gold or platinum).

- Unlike volatile cryptocurrencies like **Bitcoin**, **stablecoins** offer price stability because they are anchored in real life.

2. **Purpose of Ripple stablecoin:**

- **Compete with the giants** of the stablecoin market such as **Tether** and **Circle**.

- **Develop** the Ripple ecosystem beyond its historic **XRP** token.

- Meet the needs of **small and medium-sized businesses** and *non-bank financial institutions*.

3. **Composition of Ripple’s stablecoin:**

- The stablecoin will be backed by **cash**, **short-term US Treasury bills** and other cash equivalents.

- Ripple's reserves will be **regularly audited** by an accounting firm¹.

4. **Impact on the XRP currency:**

- Ripple's stablecoin could **strengthen investor confidence** in the Ripple ecosystem.

- However, it is important to note that the stablecoin and the **XRP** token serve **different purposes**. The stablecoin aims for stability, while **XRP** is used for fast and inexpensive fund transfers.

In summary, Ripple's stablecoin could offer a stable alternative to fiat currencies, but its direct impact on the price of **XRP** remains to be observed.

Source: Cryptoast

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