SINGAPORE - Blockchain payments firm Ripple, which is licensed in Singapore to offer cryptocurrency services, plans to launch its stablecoin later in 2024 to bring more utility and liquidity to those using its ledger.

The firm on April 4 said its stablecoin will be fully backed by US dollar deposits, short-term US government treasuries and other cash equivalents.

A stablecoin is a cryptocurrency whose value is usually tied to another asset such as fiat currency like the US dollar, or gold.

The reserve assets tied to the stablecoin will be audited by a third-party accounting firm, and the evidence will be published monthly, Ripple said in a statement.

The firm’s chief executive Brad Garlinghouse called it “a natural step” so that the firm can continue to bridge the gap between traditional finance and crypto.

“This move is also monumental for the XRP Ledger (XRPL) community, driving more use cases, liquidity and opportunities for developers and users,” he said.

The XRPL is the firm’s blockchain network that allows real-time transfers of the network’s native token, XRP, as well as other digital assets and fiat currency.

The plan is to launch the stablecoin on the XRPL and Ethereum blockchains later in 2024, subject to regulatory approval, the firm said.

It added that it intends to expand to additional blockchains and decentralised finance (DeFi) protocols and apps over time. DeFi refers to an emerging financial system that uses cryptocurrencies, blockchain technology and smart contracts to manage financial transactions.

Ripple president Monica Long said: “Bringing a trusted stablecoin onto XRPL will drive more adoption and development, contributing to a vibrant ecosystem.”

The firm estimated the stablecoin market to be valued at about US$150 billion (S$202 billion) today, and it is forecast to exceed US$2.8 trillion by 2028.

To meet this growing demand, Ripple decided to issue a stablecoin.

In October 2023, Ripple’s Singapore subsidiary, Ripple Markets Apac, was granted a Singapore licence to offer digital payment token services here.

Back then, the firm said more than 90 per cent of its business was outside the US, and that the Asia-Pacific – with Singapore as its headquarters – was one of its fastest-growing regions.

The company had said it would continue to prioritise the Asia-Pacific region for adoption of its crypto-enabled payment solutions.