Ripple said it’s set to roll out a stablecoin as companies rush into the $170B+ market
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Makin’ a splash… Ripple’s CEO said Wednesday that his crypto juggernaut plans to launch a US dollar-pegged stablecoin within “weeks.” Ripple, known for its cross-border payments tech, said it was already testing the new stable on the ethereum blockchain. FYI: stablecoins are a type of cryptocurrency pegged to real-world assets, like the US dollar, and are designed to maintain a stable value. They’re a critical part of decentralized finance, helping traders carry out complex trades without the volatility associated with crypto.
Comin’ at the king: The $170B+ stablecoin market is dominated by Tether’s USDT, which is responsible for $118B of that total. Next is Circle’s USDC with a $35B market cap.
Looking to strike it big… Ripple’s not the only biz hoping for a stablecoin payday. As the Financial Times reported, ecommerce group Mercado Libre, lender Banking Circle, crypto co Paxos, and even the state of Wyoming have all recently released stablecoin plans. And digital-payments titan PayPal intro'd its own stablecoin last year. Likely driving the stampede: the industry’s hefty margins. Many stablecoin companies keep their reserves (aka: what they use to back their coins) in US Treasuries and pocket the interest. With rates over 5%, that could translate to serious $$. Tether, which reported that as of June 30 it held nearly $81B in US Treasuries, said it made $5.2B in profit in the first six months of the year.
It’s hard to shake up a stable market… Ripple is entering a market with solidly entrenched players. Tether, which started a decade ago, has dominated the stablecoin space for years. Its top spot was solidified by the depegging of Circle’s USDC last year. Because even big players like PayPal have struggled to find their footing, Ripple could find the market a little too stable for its liking.