Ripple Announces New USD-Backed Stablecoin to Challenge USDT and USDC

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The blockchain technology firm behind XRP, Ripple, has unveiled plans to launch a new dollar-pegged stablecoin in 2025, pending regulatory approval. This strategic move positions Ripple to directly compete with dominant players like Tether’s USDT and Circle’s USDC in the rapidly expanding $150 billion stablecoin market. The announcement underscores Ripple’s ambition to enhance the utility of its XRP Ledger (XRPL) and reassert its influence in the global digital asset ecosystem.

What Is Ripple’s New Stablecoin?

Ripple’s upcoming stablecoin will be fully backed 1:1 by U.S. dollars, short-term U.S. Treasury securities, and other cash equivalents. To ensure transparency and build trust, the company plans to release monthly reserve audits conducted by an independent third-party accounting firm.

Initially, the stablecoin will be deployed on two major blockchains: the XRP Ledger and Ethereum (ETH). This dual-chain approach allows for broader accessibility and integration across decentralized finance (DeFi) platforms, payment networks, and institutional use cases.

👉 Discover how next-gen stablecoins are reshaping cross-border payments

While the initial rollout is expected to focus on the U.S. market, Ripple has indicated it may expand into Europe and Asia, depending on regulatory developments and demand.

The Growing Role of Stablecoins in Digital Finance

Stablecoins serve as a critical bridge between traditional finance and the crypto economy. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins maintain price stability by being pegged to fiat currencies like the U.S. dollar. This makes them ideal for everyday transactions, remittances, and as a store of value within decentralized applications.

Beyond simple transfers, stablecoins are programmable—meaning they can be integrated with smart contracts to automate complex financial operations, including lending, trading, and yield generation in DeFi protocols. Their efficiency, low cost, and near-instant settlement times make them particularly valuable for cross-border payments, where traditional banking systems often lag behind.

Market Potential: From $150 Billion to $2.8 Trillion by 2028

Ripple estimates that the current global stablecoin market exceeds $150 billion in total value. However, the company projects explosive growth ahead, forecasting that the market could surpass **$2.8 trillion by 2028**. This projection is driven by increasing institutional adoption, advancements in blockchain infrastructure, and rising demand for faster, cheaper international money transfers.

Brad Garlinghouse, CEO of Ripple, emphasized that the new stablecoin is designed to operate across multiple ecosystems, enabling both financial institutions and DeFi developers to unlock new opportunities. He noted that integrating a native stablecoin into the XRP Ledger would significantly boost liquidity, drive innovation, and expand real-world use cases for the network.

XRP as the “Bridge Currency” for Enhanced Utility

One of Ripple’s key differentiators is its vision for XRP as a bridge currency. In this model, XRP facilitates fast and low-cost conversions between different fiat currencies and digital assets. For example, when sending money from U.S. dollars to Japanese yen via blockchain, XRP can act as an intermediary asset—enabling near-instant settlement without relying on traditional correspondent banking networks.

By introducing a dollar-backed stablecoin directly onto the XRP Ledger, Ripple aims to create a more seamless experience for users and developers. The combination of a stable asset (the new stablecoin) and a high-performance native token (XRP) could accelerate adoption across payment corridors, DeFi platforms, and central bank digital currency (CBDC) experiments.

The XRP Ledger supports native features such as a decentralized exchange (DEX) and automated market makers (AMMs), making it well-suited for hosting stablecoins and enabling advanced trading functionalities without relying on external protocols.

FAQ: Understanding Ripple’s Stablecoin Strategy

Q: Why is Ripple launching a stablecoin now?
A: With growing demand for efficient cross-border payments and DeFi innovation, Ripple sees an opportunity to leverage its existing infrastructure—particularly the XRP Ledger—to offer a transparent, regulated, and scalable stablecoin solution.

Q: How will Ripple’s stablecoin differ from USDT or USDC?
A: While similar in structure (dollar-backed with regular audits), Ripple’s stablecoin will be deeply integrated into the XRP Ledger ecosystem, emphasizing use cases in global payments, liquidity provision, and interoperability across chains.

Q: Is the stablecoin already available?
A: No. The stablecoin is expected to launch later in 2025, subject to regulatory approvals in target markets.

Q: Will XRP be replaced by the new stablecoin?
A: No. XRP will continue to serve as the native utility token of the XRP Ledger, primarily used for transaction fees and as a bridge currency. The stablecoin complements XRP rather than replacing it.

Q: Can developers build on the XRP Ledger using the stablecoin?
A: Yes. Developers will be able to integrate the stablecoin into dApps, DeFi platforms, payment gateways, and more—leveraging XRPL’s speed, low cost, and built-in financial tools.

👉 Explore how developers are building the future of finance on high-performance ledgers

XRP Performance Lags Amid Legal Challenges

Despite its technological strengths, XRP has underperformed compared to other major cryptocurrencies over the past year. According to CoinGecko data:

This sluggish performance comes amid ongoing legal battles with the U.S. Securities and Exchange Commission (SEC). In 2020, the SEC sued Ripple for allegedly conducting an unregistered securities offering through XRP sales. While a federal court later ruled that XRP is not inherently a security, the sale of XRP to institutional investors was deemed a violation.

As of early 2025, the SEC is seeking nearly $2 billion in penalties, creating uncertainty that continues to affect investor sentiment.

Who Is Ripple? A Brief Overview

Ripple is a blockchain-based payments company focused on transforming cross-border transactions. It operates in nearly 40 U.S. states with money transmitter licenses (MTLs) and holds a Major Payment Institution (MPI) license from Singapore’s Monetary Authority (MAS).

The company’s core product suite enables banks and financial institutions to settle international payments in seconds—compared to days via traditional SWIFT systems—using the XRP Ledger (XRPL).

XRP Ledger (XRPL) is a decentralized blockchain capable of processing 1,500 transactions per second, with minimal energy consumption per transaction. It supports smart contracts, decentralized exchanges, NFTs, and now—native stablecoins.

XRP, the native cryptocurrency of XRPL, is used primarily to pay transaction fees and prevent spam attacks on the network. It also plays a vital role in liquidity management for cross-currency payments.

Core Keywords

👉 Learn how high-speed blockchains are powering the next wave of financial innovation

With its new stablecoin initiative, Ripple is positioning itself at the forefront of the next phase of digital finance—one where speed, compliance, transparency, and interoperability define success. As regulatory clarity improves and global demand for efficient payment solutions grows, Ripple’s integrated approach could play a pivotal role in shaping the future of money.