- Since security, reliability, sustainability, and interoperability are very important factors for stablecoin issuers in choosing the best blockchain, XRP Ledger (XRPL) has appeared as the best candidate.
- It is important to note that XRPL was recently chosen by Web3 payment infrastructure provider Stably to issue its USDS stablecoin.
Stablecoin has generated so much discussion this year, triggered by the Terra ecosystem collapse, the impressive rebound, and the regulation proposals by lawmakers. In August, the stablecoin ecosystem recorded a $1 trillion monthly trading volume. Coupled with its impressive growth, its use cases are being explored in the broader crypto landscape.
Stablecoin has an interesting transaction advantage and impressive stability. For this reason, it has been considered for economic growth by eliminating frictions from cross-border transactions. However, these benefits can only be maximized with the right blockchain. Since security, reliability, sustainability, and interoperability are very important factors for stablecoin issuers in choosing the best blockchain, XRP Ledger (XRPL) has appeared as the best candidate.
XRPL is said to have the capacity to handle a high volume of transactions coupled with fast processing time and cheaper costs.
The XRPL’s built-in Authorized Trust Lines feature also ensures that stablecoins and other issued tokens can only be held by accounts that the issuer themselves authorizes for an added layer of security.
It is important to note that XRPL was recently chosen by Web3 payment infrastructure provider Stably to issue its USDS stablecoin. According to reports, the decision was largely influenced by the liquidity offered by the XRPL in addition to the settlement at scale for tokenized assets. This initiation ensures that individuals and businesses can mint and redeem the USDS on the XRPL. STASIS is another new Ripple partner.
Together with Ripple, they’ll be tapping the XRP Ledger (XRPL) as a fast, low-cost, and scalable blockchain that offers clear liquidity, reliability, and interoperability advantages for stablecoin issuers.
XRPL auto-bridging feature makes it a perfect stablecoin partner
Also, the Republic of Palau is reported to be working with Ripple to examine the feasibility of introducing a government-backed stablecoin on the XRPL.
Ripple has a vision for a multi-chain, multi-asset future. In this case, this is in line with the effort of banks and regulators to onboard the multi-asset train, hence, the need for public blockchains that interoperate.
Stablecoins rely on an issuer as the counterparty which hinders them from interoperating across payment networks. With the XRP Ledger, its native digital asset, XRP, acts as a neutral bridge asset that can be sent directly without needing a central intermediary.
Stablecoin issuers can bridge two different currencies and exchange them across payment networks in a much more efficient manner. XRPL has an auto-bridging feature that improves cross-currency liquidity as well as cost-effective exchanges between XRP and digital assets on the ledger.