Cryptocurrency exchange Gemini has announced a loan agreement with Ripple for $75 million amid its preparations for an initial public offering.
Gemini's Financial Results
Documents filed with the U.S. Securities and Exchange Commission (SEC) show Gemini reported a net loss of $282.5 million in the first half of the year, a sevenfold increase from the same period last year. Revenue fell from $74.3 million to $67.9 million.
Terms of the Loan Agreement
Under the loan agreement with Ripple, Gemini has secured a loan of up to $75 million. This amount can be increased to $150 million if certain criteria are met. Each loan will be for a minimum of $5 million and will carry an interest rate of 6.5% or 8.5%. Furthermore, loans exceeding $75 million can be denominated in Ripple's dollar-backed stablecoin, RLUSD.
Ripple and Its Position in the Stablecoin Market
This deal is noteworthy because it positions Ripple's new stablecoin as a payment instrument on a leading US exchange. Experts believe Ripple aims to compete with Tether (USDT) and Circle's USDC with this move.
The agreement with Ripple highlights Gemini's need for additional financing before going public and underscores Ripple's growing significance in the stablecoin arena.
