Market liquidity is reaching record levels as Ripple prepares to impact the stablecoin market with its upcoming Ripple USD (RLUSD) stablecoin.
Although still in the beta testing stage, Ripple’s stablecoins have taken center stage recently, with Ripple previously entering the custody scene with the acquisition of Metaco and strengthening its position in the stablecoin market. I am aiming to do that.
Ripple Gear for RLUSD launch
A recent report from CryptoQuant suggests that Ripple may use RLUSD to target remittances and remittances, and the project is expected to leverage not only the Ethereum network but also the established XRP Ledger (XRPL). It points out that infrastructure is also likely to be used.
Ripple announced plans to enter the stablecoin market in April, noting that the market, then worth $150 billion, was expected to soar to more than $2.8 trillion over the next four years.
Notably, Ripple began beta testing the Ethereum network and XRPL in August, four months after announcing the product. So far, millions of tokens have been minted and burned in the testing phase. Ripple’s CEO confirmed last month that the project would launch within the next few weeks.
Stablecoin market hits new highs
Meanwhile, the broader stablecoin market is experiencing unprecedented growth as Ripple prepares for the full-scale release of RLUSD, according to a report from CryptoQuant.
As of late September 2024, stablecoin liquidity has reached an all-time high, and the market capitalization of major stablecoins has reached $169 billion. This is an increase of $40 billion (31%) year-to-date (year-to-date) and shows that demand for stablecoins is increasing.
Stablecoin Market Share | CryptoQuant
Stablecoins such as RLUSD have become important for liquidity as they provide traders with a secure way to hold and move funds between volatile digital assets and fiat currencies.
Additionally, stablecoin balances on centralized exchanges have also surged to record levels, with USDT in particular leading the way. USDT balances on the Ethereum network (ERC20) reached $22.7 billion in October, an increase of 54% ($8 billion) since the beginning of the year.
Similarly, USDT balances on the TRON network have grown to $8.5 billion, all of which is stored on centralized exchanges. This increase in liquidity can have a positive impact on the price of the cryptocurrency, as the increase in stablecoin reserves gives traders more funds to execute trades efficiently. .
USDT’s dominance in the stablecoin market continues to grow, currently accounting for 71% of the market. Notably, USDT boasts a market capitalization of nearly $120 billion, which represents a 30% year-to-date increase.
Meanwhile, Circle’s USDC followed with a 21% market share and a market capitalization of $36 billion, registering 44% year-to-date growth. The combined market capitalization growth of these two stablecoins will be crucial in increasing liquidity across the cryptocurrency ecosystem.
Potential price impact
CryptoQuant noted that increases in stablecoin market capitalization are often associated with increases in the price of Bitcoin and other cryptocurrencies. This highlights the importance of stablecoins in the broader crypto market.
Ripple’s RLUSD stablecoin could experience significant growth once it exits the beta stage, especially considering the original dual network capabilities of XRPL and Ethereum.
CryptoQuant has confirmed that the XRPL decentralized exchange (DEX) is already seeing a large volume of fiat trading such as USD and Chinese Yuan, in addition to popular stablecoins such as USDT and USDC. .
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