Ripple Forced to Create EUR Stablecoin? Community Member Shares His Take

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As a seasoned researcher with a background in digital currencies and blockchain technology, I have closely followed Ripple’s developments and community discussions for quite some time. Based on my observations and understanding of the current regulatory landscape, it appears that Ripple might indeed be considering issuing its own Euro (EUR) stablecoin due to the restrictions imposed by MiCA regulations.

Due to certain restrictions imposed by the European Markets in Crypto Assets Regulation (MiCA) on Ripple, a US fintech company valued at over $10 billion, there’s speculation that it may need to introduce its own stablecoin, pegged to the Euro (EUR). Additionally, some members of the community are pondering if XRP could potentially be used to overcome new challenges.

Ripple might need own EUR stablecoin, MiCA to blame: Community

Ripple, a prominent player in the US crypto market, could be compelled to introduce a stablecoin linked to the Euro, possibly joined by fellow competitors in the cross-border remittances sector. This idea was proposed by Crypto Eri (@sentosumosaba), an influential figure within the XRP and Ripple community, to her extensive following of 240,000 people.

It’s plausible that Ripple and other entities may introduce a Euro-pegged stablecoin in response to MiCA regulations. These new rules restrict stablecoins not directly linked to EU currencies, such as USD-pegged ones, when exchanged. The daily transaction limit is capped at one million, while trading volume is limited to €200 million.

— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) July 20, 2024

New ideas for designing stablecoins need to take into account the restrictions set forth in the MiCA regulations package. These regulations limit the issuance of non-EUR stablecoins to a maximum of one million units per day and impose a cap of €200 million.

I’ve analyzed Ripple’s upcoming USD-pegged stablecoin, and I’ve found that its current limitations may soon be reached. Given the high demand for efficient cross-border remittance solutions, it is unlikely that this stablecoin alone will be sufficient to meet those needs.

Community representative @WKahneman from Ripple/XRP emphasizes that the current limitations are insufficient for Ripple’s commercial operations. He ponders if the XRP digital asset may secure a place in the revised framework.

As a crypto investor, I find it intriguing that the trading volume for this particular coin appears to be relatively low. It’s interesting to note that large companies are being compelled to adopt or create European stablecoins. Given this trend, it seems sensible that Ripple would enter the market with their own offering. This situation could potentially lead to increased demand for XRPL and XRP capabilities.

As a crypto investor, I’d like to point out that Ripple is actively participating in the Digital Euro Association (DEA) as a supportive partner. By doing so, Ripple will be providing valuable consulting and technical support to the European Central Bank (ECB) in their initiatives related to stablecoins.

Ripple’s stablecoin ambitions taking shape in 2024

Currently, Euro-pegged stablecoins represent a minuscule portion of the market. For example, the largest Euro stablecoin, Stasis Euro, has a capitalization of approximately $137 million.

The market value of Tether and Circle’s European currency-linked offerings totals $70 million, a significantly smaller figure than the nearly $140 billion market capitalization of their dollar-backed counterparts.

Previously reported by U.Today, Ripple unveiled its US dollar-linked stablecoin in April, labeled as RLUSD. This digital currency is secured with cash and equivalent assets as backing.

Monica Long from Ripple emphasized that the forthcoming asset will not serve as a rival to XRP for facilitating cross-border transfers, but rather will work in harmony with it.

The XRP price is up by 5.9% in the last 24 hours; the coin touched a local high over $0.60.

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2024-07-20 21:04