XRP issuer Ripple has announced plans to launch a dollar-backed stablecoin, hoping to compete with Circle and Tether for market share in the next five years.
Cointelegraph spoke to David Schwartz, Ripple's CTO, ahead of the announcement. The announcement first talks about plans to release a stablecoin on the #XRP Ledger and #BTC blockchains.
Interestingly, we still don't have answers to the questions you are asking. What will the ticker be and what will we call it? For now, we will call it #Ripple stablecoin," Schwartz said during the video call.
Ripple has been mulling over the idea of launching a stablecoin for over a year now, and Schwartz believes that the current stablecoin ecosystem lacks diversity and robustness. Schwartz estimates the current steblecoin market at $150 billion and says another major player could enter the market:
I think it will exceed $2 trillion by 2028, but there are only two leaders in the market. We don't think it will be a winner-take-all ecosystem, especially on the DeFi side.
Ripple's stub coin will be pegged to the U. S. dollar at a 1:1 ratio, and the company plans to back its tokens with dollar deposits, short-term U. S. government bonds and "other cash equivalents" Schwartz said Ripple will try to emulate Circle in terms of compliance and possibly try to compete with the issuer (USDC). try to compete with it, he said. try to compete with it, he said:
"Our approach will be very 'compliance-oriented'. Our approach will be very "compliance-oriented". 'We're very transparent about what our assets are backed by, so it's like competing directly with the #USDC .
'We're trying to gain market share. We're trying to gain market share. We're not looking to increase our two decimal places by putting other people's money at risk.
Circle's transparency page shows a small surplus of reserve assets backing USDC tokens in circulation. Source: Circle.
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