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Ripple Stablecoin Eyes $3T Market Despite Security Status Concerns

Ripple has provided insights into stablecoin, highlighting its types, use cases, and projections in anticipation of its forthcoming stablecoin.

The stablecoin space has been garnering momentum recently. At press time, the market is valued at around $160 billion, with Tether’s USDT accounting for over $110 billion of this valuation.

Ripple Eyes Stablecoin Market Potentials

Like most crypto sectors, the stablecoin market has also received mouthwatering forecasts. Top analysts project that the market could reach a valuation of $3 trillion by 2028. Prominent brokerage firm Bernstein issued this forecast last year.

Interestingly, Ripple referenced Bernstein’s forecast about the stablecoin market in its recent report on the digital asset. Ripple said the $3 trillion forecast represents a 22x surge from the market’s valuation at the time of the report.

It is estimated that the stablecoin market could reach $3T by 2028.

Understand the role stablecoins play in the financial markets and learn about their use cases and how they push financial services innovation. https://t.co/F9zxkNVMnw

— Ripple (@Ripple) May 8, 2024

Recognizing this potential, Ripple plans to introduce a USD-backed stablecoin later this year on two prominent blockchains – XRPL and Ethereum. The leading payments company intends to venture into the stablecoin market early before the projection materializes by 2028.

By doing so, Ripple will rival other prominent players in the stablecoin sector, including Tether and Circle, whose stablecoins are the top two by market cap.

Ripple’s Latest Insight on Stablecoin

In preparation for its stablecoin launch, Ripple highlighted the types, benefits, utilities, and use cases of the digital asset.

According to Ripple, the three types of stablecoins are fiat-collateralized, crypto-collateralized, and algorithmic (non-collateralized). Notably, the upcoming Ripple stablecoin is fiat-collateralized and backed by USD at a 1:1 ratio.

Fiat-collateralized stablecoins are mainly used for daily transactions and payments, cross-border settlements and remittances, trading pairs on exchanges, and integration into decentralized finance (DeFi) applications.

Speculations Regarding Ripple’s Stablecoin

Speculation surrounds the upcoming launch of Ripple’s stablecoin. Several crypto enthusiasts believe Ripple intends to use its forthcoming stablecoin to serve ODL customers in the U.S.

Since the SEC seeks a permanent injunction on all Ripple’s XRP sales to institutional clients, experts speculate that the company will use its forthcoming stablecoin as a bridge asset on ODL to serve U.S. customers.

SEC Labels Ripple’s Stablecoin Unregistered Crypto Asset

Meanwhile, Ripple’s blog post comes a few days after the SEC classified its upcoming stablecoin as an unregistered crypto asset.

In its remedies reply brief, the SEC characterized Ripple’s proposed stablecoin as an unregistered crypto asset. The regulatory agency made the assertion while emphasizing Ripple’s violation of securities laws via its sale of XRP to institutional clients, particularly ODL customers, between 2013 and 2020.

The SEC believes Ripple will use the stablecoin to navigate the United States regulatory landscape if the court grants its permanent injunction requests.

Nonetheless, Ripple’s piece on stablecoin aims to clarify certain misconceptions regarding its forthcoming digital asset.

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