“That’s why we’re launching a stablecoin”

Strictly speaking, the stablecoin market does not live up to its name. There are actually only two providers that share the business with US dollar-denominated cryptocurrencies: Circle and Tether. Together, their tokens USDC and USDT account for about 90 percent of the total market capitalization. Ripple now wants to break this dominance. What has to happen for this venture to succeed and what hurdles stand in the way of Ripple’s stablecoin is explained by CEO Brad Garlinghouse at the Paris Blockchain Week, where BTC-ECHO was there for you.

In general, the market’s growth potential is gigantic. The total market capitalization of $150 billion could increase “twenty-fold” in the next four to five years, explains Garlinghouse, to $2.5 trillion to $3 trillion. That would be more than the current value of the entire crypto market. “Ripple has to play a role in this,” the 53-year-old continues.

This would first require a robust banking infrastructure to which the stablecoin is connected. Here, Ripple’s long-standing partnerships with the banking sector turn out to be an important cornerstone.

Regulatory uncertainty in the USA a brake on it?

Admittedly, it is an ambitious and risky move that Ripple has pulled out of a hat. With the focus on developing and issuing a US dollar-denominated stablecoin from the United States, the project is starting in a jurisdiction in which the regulatory handling of these stable-value cryptocurrencies is not yet regulated at all. There are currently discussions about various legislative proposals. But nothing has been decided yet.

However, Garlinghouse expects a decision in the medium term: in favor of a “stablecoin bill”: “I believe that we will see a corresponding legal framework after the elections and before any actual crypto regulation.” He is not alone in this. Industry colleague Jeremy Allaire, CEO of Circle, recently expressed similar optimism.

“There is now clarity on XRP in the USA”

At least there is now some clarity for two crypto assets, emphasizes Garlinghouse. On the one hand, Bitcoin, with the approval of spot ETFs in January, has finally established itself on the traditional financial market. On the other hand, Ripple’s native coin, XRP. After a long-term legal dispute with the US Securities and Exchange Commission (SEC), the responsible court made a ruling in favor of Ripple in July last year. Reason enough for Garlinhouse to emphasize again: “In the USA there are only two crypto assets where there is regulatory clarity: Bitcoin. And based on the past legal dispute, we also know: XRP is not a security.”

In the context of the planned stablecoin, this is an important classification for Ripple. In addition to Ethereum, the cryptocurrency should also run on the XRP blockchain. However, the question remains as to exactly when the new product will be launched and on which crypto exchange the coin will be launched. In the press release, Ripple assumed a launch later this year.

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