[Bitcoin Now] iM Securities: "Rapid Growth of Stablecoins... Set to Threaten Ripple's Position"

iM Securities analyzed on August 19 that Ripple (XRP), which ranks third in virtual asset market capitalization, has grown as a fast and low-cost international remittance solution, but its position is now being threatened by the rapid rise of stablecoins.

Yang Hyunkyung, a researcher at iM Securities, stated in a report on August 19, "Ripple reduced the time required for international remittances from 37 days to just 35 seconds compared to the traditional SWIFT network," adding, "Transaction fees have also been drastically lowered to the range of 0.0002 to 0.0004 XRP, which has enabled Ripple to expand partnerships with global financial institutions."

However, she assessed that the emergence of stablecoins, which have low price volatility, could undermine Ripple's core competitiveness.

According to iM Securities, the current stablecoin market is valued at approximately 270 billion dollars, with 98% being dollar-based. The uses are diverse: ▲decentralized finance and trading (67%), ▲overseas remittances (15%), ▲inflation hedging (10%), and ▲product payments (5%). Notably, in the international remittance market, stablecoins are starting to replace both SWIFT and Ripple by leveraging price stability and low costs.

She explained, "Both Ripple and stablecoins are based on blockchain technology and can provide fast and low-cost international remittance services, so they are expected to replace the traditional SWIFT network," adding, "The issue is that the growth of the stablecoin market is threatening Ripple (XRP)."

She continued, "Stablecoins are pegged one-to-one to fiat currencies, so the risk of price fluctuations is limited. In contrast, Ripple, like Bitcoin and Ethereum, is subject to price volatility based on market demand and supply, which means it is not entirely suitable for international remittances." She emphasized, "From this perspective, there is a threat that stablecoins could replace Ripple (XRP) as the bridge currency for international remittances."

In response, Ripple adopted a two-track strategy by launching the US dollar-pegged stablecoin 'RLUSD' at the end of last year. The plan is for XRP to serve as an ultra-fast bridge currency and RLUSD to act as a stable store of value, complementing each other. Currently, RLUSD's market capitalization is about 660 million dollars, accounting for only 0.002% of the market share, but Ripple is pushing for market expansion, such as by acquiring the stablecoin payment platform 'Rail' for 200 million dollars.

She concluded, "Issuing RLUSD in the rapidly growing stablecoin market appears to be an inevitable choice for Ripple," and predicted, "Going forward, the key factors will be the global expansion of RLUSD's network, entry into the regulated financial sector, securing regulatory friendliness, multi-chain expansion, and differentiated positioning from USDT and USDC."