Ripple has been included on the list of the 140 financial, technological, and crypto heavyweights that will use a new stablecoin that has been dubbed “Open USD.”
The product, which has been backed by titans of the likes of Mastercard, BlackRock, Google, and Visa, and Stripe, aims to address various bottlenecks that have hampered the growth of the stablecoin market (scalability, governance, and other issues).
Open Standard, an independent entity, will be responsible for issuing and operating the new stablecoin, meaning that it will not be controlled by a single corporate issuer.
A new stablecoin model?
The current stablecoin ecosystem often burdens large-scale businesses with prohibitive minting and redemption fees. At the same time, third-party issuers hoard the lucrative yield generated by the underlying cash reserves.
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The new stablecoin is specifically addressing these bottlenecks. Participating businesses will be able to mint and redeem Open USD entirely free of charge. The earnings generated by the stablecoin will be shared by all of the partners. What is notable is that the consortium model also prevents unilateral changes to the protocol.
TradFi, big tech, and crypto
Ripple has notably aligned with traditional payment giants like Mastercard, Visa, and American Express, as well as institutional banking heavyweights like BlackRock and BNY.
The project also boasts the backing of major tech platforms such as Google, DoorDash, and Shopify, alongside crypto-native firms like Coinbase, Fireblocks, and Solana.
Open USD will offer Ripple a highly liquid rail for cross-border settlement and decentralized finance operations.
It remains to be seen how Ripple’s USD (RLUSD), Ripple’s own highly regulated stablecoin with a market cap of $1.4 billion, will fit into this.
Mastercard has noted that it will require “trusted networks, broad participation, and collaboration across the industry.”
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