In an attempt to upend a market where the top two incumbents control almost 90% of the value, cryptocurrency company Ripple introduced a stablecoin tied to the US dollar on Tuesday.
More than a year after achieving a historic victory in a lawsuit against the Securities and Exchange Commission last year, the collaboration represents a significant turning point for Ripple.
It will, however, have a difficult time breaking into a crowded market where, according to CoinGecko data, the two largest companies, Tether and USD Coin (USDC), control about 90% of the market value.
According to Ripple, a number of platforms, including Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish, will offer the stablecoin, RLUSD, on a global scale.
Digital tokens known as stablecoins are made to maintain a fixed value. They are supported by conventional currencies like the euro or the US dollar.
Because they are protected from the extreme price swings experienced by bitcoin and ether, they may be more appropriate for payments and for converting cryptocurrency tokens into fiat money.
According to Ripple, every RLUSD coin is fully backed by U.S. dollar deposits, U.S. government bonds, and cash equivalents.
Sheila Bair, the former chair of Federal Deposit Insurance Corp., the U.S. banking regulator, has been added to RLUSD’s advisory board by the company.
Bair formerly served as the assistant secretary for financial institutions at the U.S. Treasury Department and chaired the board of the government-backed home lending corporation Fannie Mae.
Chris Larsen, the executive chair and co-founder of Ripple, and David Puth, the former CEO of CENTRE Consortium, will serve on the board.
Formerly in charge of USDC, CENTRE was a partnership between stablecoin network Circle and cryptocurrency exchange Coinbase. After it was shut down last year, Circle assumed complete authority over the issuance and management of USDC.
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