Ripple Pushes Stablecoin Plans, But U.S. Trails E.U. Regs
- Ripple announced acquired Standard Custody.
- The move will complement Ripple’s stablecoin ambitions.
- MiCA stablecoin rules stoke fears U.S. firms will be left behind.
Stablecoins come in various types, such as asset-backed and algorithmic, and form a critical component of the crypto ecosystem, bridging the worlds of digital assets and traditional finance.
In April, Ripple CEO Brad Garlinghouse surprised many by announcing the company plans to launch its own stablecoin offering . Two months later, Ripple is doubling down, with its recent acquisition of Standard Custody bringing it one step closer to realizing its stablecoin ambitions.
Ripple Moves Closer
Ripple moved closer to realizing its stablecoin ambitions on June 11 as it announced acquiring digital asset custodian Standard Custody. The deal, which received necessary regulatory approvals, added a New York Department of Financial Services license and a Singaporean Major Payment Institution license to Ripple’s growing portfolio of companies.
Sponsored
The acquisition positions Ripple to strengthen its blockchain-based enterprise infrastructure solutions, allowing it to better service institutional customers looking to tokenize, custody, transfer, and trade digital assets.
Notably, Ripple stated the deal “follows close on the heels” of its plans to launch a USD-backed stablecoin. It sees this as a natural extension of its cross-border payments business, which bridles crypto and traditional finance.
Read More
XRP Price Awaits Clarity as Ripple Hangs in Limbo
XRP Price Takes a Dive, But Analyst Predicts “Legendary” Surge
Ripple vs. SEC Appeals Court Likely as Settlement Paves the Way
To lead its stablecoin initiative, Ripple appointed Jack McDonald, CEO of the acquired Standard Custody, as Ripple’s new senior vice president of stablecoins. McDonald brings over three decades of financial services experience as he takes on making Ripple’s stablecoin ambitions a reality.
Sponsored
However, with its focus on the U.S. market, Ripple may face challenges as the E.U.’s comprehensive Markets in Crypto-Assets ( MiCA ) legislation takes effect and shapes the stablecoin regulatory landscape.
MiCA Rules Due to Kick-In
In a landmark move for the E.U. regulatory landscape, MiCA legislation on stablecoins will take effect on June 30. As that date approaches, concerns are mounting that the U.S., which has long been viewed as harboring a hostile approach to cryptocurrency, risks falling behind as the stablecoin industry coalesces around the MiCA framework.
Lawyer Jake Chervinsky voiced this worry, stating that with MiCA’s stablecoin rules ratified, stablecoin firms seem to be “setting up in Europe and molding themselves by EU standards,” which represents a major blow to the U.S. crypto industry.
MiCA’s stablecoin regulations take effect across the EU on June 30.
— Jake Chervinsky (@jchervinsky) June 10, 2024
The EU figured out how to regulate this market before the US did.
Now it looks like stablecoin issuers and providers are setting up in Europe and molding themselves by EU standards.
A big missed opportunity 🇺🇸
Under MiCA rules, only regulated entities can issue approved fiat-backed stablecoins which must maintain a 1:1 reserve ratio held by a third-party custodian. Algorithmic stablecoins are banned, as regulators aim to ensure these digital assets can reliably function as payment methods and stores of value.
On the Flipside
- Stablecoin regulation impacts cross-border payments, remittances, and the wider token economy.
- Cardano founder Charles Hoskinson believes algorithmic stablecoins have inherent benefits such as on-chain management and custody.
Why This Matters
Ripple’s stablecoin aspirations, bolstered by its latest acquisition, face a pivotal test with the EU’s MiCA rules setting the regulatory tone.
Ripple boasts a significant presence among Japanese financial institutions.
Ripple In Partnership with 80% of Japanese Banks, Study Reveals
Samson Mow reminds Bitcoin investors of the bigger picture during the market sell-off.
Samson Mow Rallies Bitcoin Investors During Market Dump
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Bitcoin Dominance Nears Peak Amid Bearish Divergence
![](https://img.bitgetimg.com/multiLang/image/social/225be8c12831b6325c40d486382b137e1725755405996.jpg)
Top 5 Decentralized Protocols: Unparalleled Innovations in the Crypto Space
![](https://img.bitgetimg.com/multiLang/image/social/5f8d8e8c87ee028496ff318240f8e9dc1725755405787.jpg)
Justin Sun Announces Major Update for Tron (TRX)
Tron (TRX) founder Justin Sun signaled an important change for the altcoin in his statement.
Warren Buffett’s Crypto Gift from Justin Sun Surges 1,000% in Value by 2024
![](https://img.bitgetimg.com/multiLang/image/social/d7215344ad2c6159afe786d833a13f3a1725746405107.jpg)