The broader crypto market is presently experiencing a significant increase in liquidity, primarily driven by stablecoins, as Ripple conducts a series of tests with its new stablecoin project
Ripple is on the brink of entering the stablecoin market with the imminent launch of Ripple USD (RLUSD) in the coming weeks. Monica Long, the president of Ripple, has confirmed that the initiative will commence this year.
Millions of RLUSD tokens have been minted and destroyed across the Ethereum and XRP Ledger blockchain networks while the project is currently in beta testing.
Ripple’s stablecoin is designed to address the increasing demand for stablecoins by providing enhanced liquidity and efficiency. The market has experienced a significant increase in liquidity, which is indicative of the growing demand for stablecoins.
In late September 2024, the total market capitalization of significant USD-backed stablecoins reached $169 billion, per the most recent weekly report from CryptoQuant. This amounts to a market liquidity increase of $40 billion, a 31% year-to-date increase.
Stablecoins, such as USD Coin and Tether, continue to be at the forefront of the movement, significantly contributing to the overall liquidity of the crypto market.
Since the beginning of the year, Tether’s USDT, the largest stablecoin by market capitalization, has increased by $28 billion, reaching $120 billion. The growth is occurring despite regulatory obstacles associated with MiCA, as Coinbase intends to delist the asset in the EU.
USDT’s $120 billion valuation grants it a dominant 71% share of the stablecoin market.
Furthermore, Circle’s USDC, which is entirely MiCA-compliant, follows with a market capitalization of $36 billion, a 44% increase in 2024. Ripple has previously stated that its forthcoming RLUSD will be regulatory compliant.
Centralized exchanges are experiencing a substantial effect due to increased stablecoin liquidity. USDT balances on these platforms have reached an all-time high of $22.7 billion on the Ethereum network, representing a 54% year-to-date increase.
Furthermore, the TRON network facilitates the existence of USDT worth $8.5 billion on centralized exchanges. Larger stablecoin reserves on exchanges are frequently associated with increased Bitcoin prices. Bitcoin BTC -1.15% Bitcoin and other cryptocurrencies.
Nevertheless, Bitcoin’s price has remained comparatively stable, even though USDT balances on exchanges have increased by 20% since August 2024, despite this influx of liquidity.
