After focusing on cross-border payments using XRP, blockchain firm Ripple is entering the stablecoin market valued at $150 billion with a new product.

Ripple has revealed its intention to launch a stablecoin backed by the US dollar to compete with the existing leaders, Tether's USDT and Circle's USDC. Ripple's CTO, David Schwartz, highlighted the growing market for stablecoins, which is expected to reach $2.8 trillion by 2028.

The new stablecoin will be fully supported by dollar deposits, U.S. Treasuries, and cash equivalents held at U.S. banks. To build trust among users, Ripple plans to undergo regular third-party audits and provide public attestations regarding its reserve holdings, which sets it apart from Tether in terms of transparency.

This move by Ripple coincides with its ongoing legal battle with the SEC concerning XRP's classification as a security. Despite recent positive rulings that XRP itself is not a security, Ripple still faces allegations of unregistered sales totaling $728.9 million to institutional investors.

The launch of this stablecoin is not solely a financial decision for Ripple; it also aligns with their goal of advancing the XRP ecosystem. The stablecoin will offer additional liquidity to complement XRP for Ripple's On-Demand Liquidity service used by banks and payment companies that struggle with insufficient XRP market liquidity in specific regions.