In 2020, the U.S. SEC accused Ripple and its co-founders of breaching securities laws by selling its native cryptocurrency XRP without first registering it with the SEC. Crypto startup Ripple is entering the stablecoin market with a digital currency pegged to the U.S. dollar. The stablecoin will be backed 1-to-1 by assets like U.S. dollar deposits and government bonds held in reserve by Ripple. The company plans to release monthly reports on its reserves. Ripple is starting with the U.S. market but may expand to other regions.
Ripple faces stiff competition from stablecoin giants like Tether and Circle. PayPal has also launched its own U.S. dollar stablecoin. Ripple CEO Brad Garlinghouse is confident in the company’s position in the market. The decision to launch a stablecoin was driven by the actions of Tether and Circle, which faced depegging issues in the past.
Ripple sees the stablecoin as complementing its existing products, like On-Demand Liquidity. Despite challenges with XRP adoption in the past, Ripple remains committed to its payment token and believes stablecoins can enhance the XRP ecosystem. The company is optimistic about the future of stablecoins and XRP.
The SEC lawsuit against Ripple in 2020 accused the company of illegal XRP sales. The court ruled that XRP is not a security but sales to institutions were unlawful. The SEC is seeking $2 billion in damages from Ripple, but Garlinghouse expects a much lower settlement in the millions of dollars. Ripple remains confident in its position despite the legal challenges.
Overall, Ripple is making moves in the stablecoin market and remains committed to its goals.
In 2020, the U.S. SEC accused Ripple and its co-founders of breaching securities laws by selling its native cryptocurrency XRP without first registering it with the SEC. In response, Ripple has launched a stablecoin pegged to the U.S. dollar, backed by assets like U.S. dollar deposits, U.S. government bonds, and cash equivalents. Ripple’s stablecoin will be audited and accounted for in monthly attestation reports. The company plans to offer regional products in non-U.S. markets as well. The move puts Ripple in competition with stablecoin giants like Tether and Circle. Ripple CEO Brad Garlinghouse stated that the decision to launch a stablecoin was influenced by the “depegging” of Tether’s USDT token and Circle’s USDC. Despite facing challenges with banks and payment firms in using XRP for cross-border transactions, Ripple remains committed to XRP as a payment token. The company expects to settle with the SEC for a fraction of the $2 billion they are seeking in their lawsuit.
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