XRP News Today: USDC Launches on XRP Ledger Amid US Stablecoin Regulation Push

Circle's USDC stablecoin has launched on the XRP Ledger, marking a significant development in the cryptocurrency space. This move brings the overcollateralized dollar-pegged token to users of the layer-1 blockchain network, enabling investors to utilize XRP as a bridge currency for transferring stablecoins between decentralized exchanges through an auto-bridging feature.
Markus Infanger, the senior vice president of RippleX, highlighted the importance of stablecoins, stating that they serve as key entry points connecting traditional financial markets with the crypto space. This integration is crucial for use cases focused on utility rather than speculation, underscoring the practical applications of stablecoins in the financial ecosystem.
The launch of USDC on the XRP Ledger comes at a time when there is a concerted effort to establish comprehensive stablecoin regulations in the United States. The stablecoin sector has grown to over $237 billion in market capitalization, with significant geo-strategic and macroeconomic implications. This growth has drawn the attention of lawmakers and officials who view stablecoins as a means to mitigate de-dollarization by foreign countries offloading US government debt.
Overcollateralized stablecoin issuers purchase short-term US Treasury bills to back their digital fiat tokens, collecting the yield from these government securities as profit. This practice helps to stabilize the value of stablecoins and provides a source of income for issuers. However, as sovereign powers dump US debt instruments, bond yields spike, leading to higher debt service costs for the government. This, in turn, makes the national debt more costly to maintain and further inflates the principal amount owed, creating a cycle of debt monetization to pay back creditors and fund the budget.
During the White House Crypto Summit, US Treasury Secretary Scott Bessent emphasized the importance of prioritizing stablecoin development to protect US dollar hegemony. By leveraging the demand for stablecoins, the US aims to increase the salability of the US dollar globally. However, critics of the fiat system, such as Bitcoin advocate Max Keiser, argue that this plan will only delay the inevitable collapse of the dollar and will not save it. Keiser believes that stable tokens backed by gold will outcompete dollar-pegged stablecoins due to gold's high stock-to-flow ratio, which protects its value from rapid inflation and price depreciation.

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