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Ripple, Developer Behind XRP Ledger, Enters Stablecoin Fray vs. Tether, USDC
April 04, 2024
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The token will be "100% backed by U.S. dollar deposits, short-term U.S. government Treasuries and other cash equivalents," according to the company.

Ripple, the enterprise-focused blockchain service and creator of the XRP Ledger, is introducing its own stablecoin pegged to the price of the U.S. dollar.

"The stablecoin market is over $150 billion today and is forecasted to exceed $2.8 trillion by 2028," Ripple said in a statement shared with CoinDesk. "There’s clear demand for stablecoins that deliver trust, stability and utility."

The company said the token, which it plans to release "later this year," will be "100% backed by U.S. dollar deposits, short-term U.S. government Treasuries and other cash equivalents." The stablecoin will be deployed onto Ripple's institution-focused XRP Ledger along with the Ethereum blockchain to start out, and it will be based on Ethereum's ERC-20 token standard.

Ripple's announcement comes as stablecoins have proven one of the most popular types of digital assets among crypto traders, free (in theory) from the price volatility witnessed in larger cryptocurrencies like bitcoin (BTC) and Ethereum's ether (ETH).

"What we think is going to be our differentiator is going to be the fact that the assets are going to be in dollars, Treasuries – rock solid," Ripple CTO David Schwartz told CoinDesk in an interview. "We're not trying to juice the last couple of decimal points out of this. We're looking to conquer the market and be in it for the long term."

As for why Ripple – still battling an enforcement case brought by the U.S. Securities and Exchange Commission – has decided to jump into the stablecoin game, Schwartz said that the decision, in part, came down to simple "dollars and cents."

"Part of it is just opportunistic. It's a growing market," he said. "You could be a bank that pays no interest. That seems like a pretty good business opportunity."

Schwartz said the new stablecoin could also help breathe some life into the XRP Ledger's decentralized finance ecosystem, which has a decentralized exchange but relatively low usage relative to other chains.

According to Schwartz, transparency – historically a key point of scrutiny for stablecoin issuerswill be a key focus for Ripple as it rolls out its new token.

"We're gonna have public audits on a monthly basis, hopefully by a top-tier accounting firm and will disclose more on that later," said Schwartz. "We're aiming for complete transparency. You know, we'll do whatever we need to do to address those issues."

Beyond the promise of transparency, Schwartz emphasized that the potential growth of the stablecoin market – currently dominated by Tether's USDT token and Circle's USDC – serves as a disincentive for Ripple or any other stablecoin provider to act dishonestly. Coinbase, the publicly traded U.S. crypto exchange, is an investor in Circle.

"In the early days of Tether, people were expecting it to blow up any day, and they felt like it was really sketchy," said Schwartz. But now, "if you're Tether, it wouldn't make sense for you to run off with people's money," said Schwartz. "Even if that was your plan, you'd wait to do it" because "the market is only growing."

In Ripple's case, "we're not trying to squeeze a couple of extra pennies out – we don't need to," said Schwartz. "Our balance sheet is rock solid."

The Ripple CTO said his token will be aimed primarily at enterprise customers and banking institutions, organizations for whom "those kinds of practical arguments aren't really prescient because they have to justify their decisions" to "stockholders and to regulators and so on."

To satisfy the needs of this market segment, Ripple says it is using U.S. banks to hold its reserves and is taking what it terms a "compliance-first mindset."

USDC is currently the market leader among compliance-oriented stablecoin consumers, but Schwartz said he doesn't see it as "a winner takes all" environment.

"If we were a solid number three and the market grows 12x, that's not a failure scenario," said Schwartz. "Obviously we would like to do better than that, but that's not a failure case, that's still pretty gosh darn good."

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Musk Turns On Starlink to Save Iranians from Regime’s Internet Crackdown

Elon Musk, the world’s richest man and a visionary behind SpaceX, has flipped the switch on Starlink, delivering internet to Iranians amid a brutal regime crackdown.

This move comes on the heels of Israeli strikes targeting Iran’s nuclear facilities, as the Islamic Republic cuts off online access.

The former Department of Government Efficiency chief activated Starlink satellite internet service for Iranians on Saturday following the Islamic Republic's decision to impose nationwide internet restrictions.

As the Jerusalem Post reports, that the Islamic Republic’s Communications Ministry announced the move, stating, "In view of the special conditions of the country, temporary restrictions have been imposed on the country’s internet."

This action followed a series of Israeli attacks on Iranian targets.

Starlink, a SpaceX-developed satellite constellation, provides high-speed internet to regions with limited connectivity, such as remote areas or conflict zones.

Elizabeth MacDonald, a Fox News contributor, highlighted its impact, noting, "Elon Musk turning on Starlink for Iran in 2022 was a game changer. Starlink connects directly to SpaceX satellites, bypassing Iran’s ground infrastructure. That means even during government-imposed shutdowns or censorship, users can still get online, and reportedly more than 100,000 inside Iran are doing that."

During the 2022 "Woman, Life, Freedom" protests, Starlink enabled Iranians to communicate and share footage globally despite network blackouts," she added.

MacDonald also mentioned ongoing tests of "direct-to-cell" capabilities, which could allow smartphone connections without a dish, potentially expanding access and supporting free expression and protest coordination.

Musk confirmed the activation, noting on Saturday, "The beams are on."

This follows the regime’s internet shutdowns, which were triggered by Israeli military actions.

Adding to the tension, Israeli Prime Minister Benjamin Netanyahu addressed the Iranian people on Friday, urging resistance against the regime.

"Israel's fight is not against the Iranian people. Our fight is against the murderous Islamic regime that oppresses and impoverishes you,” he said.

Meanwhile, Reza Pahlavi, the exiled son of Iran’s last monarch, called on military and security forces to abandon the regime, accusing Supreme Leader Ayatollah Ali Khamenei in a Persian-language social media post of forcing Iranians into an unwanted war.

Starlink has been a beacon in other crises. Beyond Iran, Musk has leveraged Starlink to assist people during natural disasters and conflicts.

In the wake of hurricanes and earthquakes, Starlink has provided critical internet access to affected communities, enabling emergency communications and coordination.

Similarly, during the Ukraine-Russia conflict, Musk activated Starlink to support Ukrainian forces and civilians, ensuring they could maintain contact and access vital information under dire circumstances.

The genius entrepreneur, is throwing a lifeline to the oppressed in Iran, and the libs can’t stand it.

Conservative talk show host Mark Levin praised Musk’s action, reposting a message stating that Starlink would "reconnect the Iranian people with the internet and put the final nail in the coffin of the Iranian regime."

"God bless you, Elon. The Starlink beams are on in Iran!" Levin wrote.

Musk, who recently stepped down from leading the DOGE in the Trump administration, has apologized to President Trump for past criticisms, including his stance on the One Big Beautiful Bill.

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GENIUS Act lets State banks conduct some business nationwide. Regulators object

The Senate passed the GENIUS Act for stablecoins last week, but significant work remains before it becomes law. The House has a different bill, the STABLE Act, with notable differences that must be reconciled. State banking regulators have raised strong objections to a provision in the GENIUS Act that would allow state banks to operate nationwide without authorization from host states or a federal regulator.

The controversial clause permits a state bank with a regulated stablecoin subsidiary to provide money transmitter and custodial services in any other state. While host states can impose consumer protection laws, they cannot require the usual authorization and oversight typically needed for out-of-state banking operations.

The Conference of State Bank Supervisors welcomed some changes in the GENIUS Act but remains adamantly opposed to this particular provision. In a statement, CSBS said:

“Critical changes must be made during House consideration of the legislation to prevent unintended consequences and further mitigate financial stability risks. CSBS remains concerned with the dramatic and unsupported expansion of the authority of uninsured banks to conduct money transmission or custody activities nationwide without the approval or oversight of host state supervisors (Sec. 16(d)).”

The National Conference of State Legislatures expressed similar concerns in early June, stating:

“We urge you to oppose Section 16(d) and support state authority to regulate financial services in a manner that reflects local conditions, priorities and risk tolerances. Preserving the dual banking system and respecting state autonomy is essential to the safety, soundness and diversity of our nation’s financial sector.”

Evolution of nationwide authorization

Section 16 addresses several issues beyond stablecoins, including preventing a recurrence of the SEC’s SAB 121, which forced crypto assets held in custody onto balance sheets. However, the nationwide authorization subsection was added after the legislation cleared the Senate Banking Committee, with two significant modifications since then.

Originally, the provision applied only to special bank charters like Wyoming’s Special Purpose Depository Institutions or Connecticut’s Innovation Banks. Examples include crypto-focused Custodia Bank and crypto exchange Kraken in Wyoming, plus traditional finance player Fnality US in Connecticut. Recently the scope was expanded to cover most state chartered banks with stablecoin subsidiaries, possibly due to concerns about competitive advantages.

Simultaneously, the clause was substantially tightened. The initial version allowed state chartered banks to provide money transmission and custody services nationwide for any type of asset, which would include cryptocurrencies. Now these activities can only be conducted by the stablecoin subsidiary, and while Section 16(d) doesn’t explicitly limit services to stablecoins, the GENIUS Act currently restricts issuers to stablecoin related activities.

However, the House STABLE Act takes a more permissive approach, allowing regulators to decide which non-stablecoin activities are permitted. If the House version prevails in reconciliation, it could result in a significant expansion of allowed nationwide banking activities beyond stablecoins.

Is it that bad?

As originally drafted, the clause seemed overly permissive.

The amended clause makes sense for stablecoin issuers. They want to have a single regulator and be able to provide the stablecoin services throughout the United States. But it also leans into the perception outside of crypto that this is just another form of regulatory arbitrage.

The controversy over Section 16(d) reflects concerns about creating a regulatory gap that allows banks to operate interstate without the oversight typically required from either federal or state authorities. As the two Congressional chambers work toward reconciliation, lawmakers must decide whether stablecoin legislation should include provisions that effectively reduce traditional banking oversight requirements.

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If you find value in my content, consider showing your support via:

💳 PayPal: 
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Dubai regulator VARA classifies RWA issuance as licensed activity
Virtual Asset Regulatory Authority (VARA) leads global regulatory framework - makes RWA issuance licensed activity in Dubai.

Real-world assets (RWAs) issuance is now licensed activity in Dubai.

~ Actual law.
~ Not a legal gray zone.
~ Not a whitepaper fantasy.

RWA issuance and listing on secondary markets is defined under binding crypto regulation.

It’s execution by Dubai.

Irina Heaver explained:

“RWA issuance is no longer theoretical. It’s now a regulatory reality.”

VARA defined:

- RWAs are classified as Asset-Referenced Virtual Assets (ARVAs)

- Secondary market trading is permitted under VARA license

- Issuers need capital, audits, and legal disclosures

- Regulated broker-dealers and exchanges can now onboard and trade them

This closes the gap that killed STOs in 2018.

No more tokenization without venues.
No more assets without liquidity.

UAE is doing what Switzerland, Singapore, and Europe still haven’t:

Creating enforceable frameworks for RWA tokenization that actually work.

Matthew White, CEO of VARA, said it perfectly:

“Tokenization will redefine global finance in 2025.”

He’s not exaggerating.

$500B+ market predicted next year.

And the UAE just gave it legal rails.

~Real estate.
~Private credit.
~Shariah-compliant products.

Everything is in play.

This is how you turn hype into infrastructure.

What Dubai is doing now is 3 years ahead of everyone else.

Founders, investors, ecosystem builders:

You want to build real-world assets onchain.

Don’t waste another year waiting for clarity.

Come to Dubai.

It’s already here.

 

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If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
2) or visit https://www.paypal.me/thedinarian

🔗 Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! Namasté 🙏 Crypto Michael ⚡  The Dinarian

 

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