The US Securities and Exchange Commission (SEC) has targeted Ripple‘s proposed stablecoin in its latest court filing against the company. In a May 7 redacted remedies reply brief, the SEC described the planned token as an “unregistered crypto asset.”
Notably, the regulator did not explicitly mention a “stablecoin” in its filing. Instead, the SEC referenced Ripple’s press release of April 4 announcing the issuance of the dollar-pegged digital asset. The company revealed its intention to issue a stablecoin in April but has not provided further details about the token since then.
1/ The stablecoin market is booming – around $150B today, and projected to soar past $2.8T by 2028. There's a clear demand for trust, stability, and utility. That's why later this year we’re launching a stablecoin pegged 1:1 to the USD on the XRP Ledger and Ethereum.…
— Ripple (@Ripple) April 4, 2024Moreover, the documents argue that this proposed stablecoin is further evidence that Ripple will continue to engage in unregulated activities if a permanent injunction is not granted.
Ripple (XRP) 7-day price chart. Source: Finbold
In conclusion, XRP investors and Ripple supporters eagerly awaited the announced stablecoin, which could now be postponed considering these current developments. This legal battle has lasted for years, and traders have constantly used them to bet on the token’s positive or negative price performance.
Thus, traders must play cautiously in the sight of further regulatory scrutiny by the United States authority.
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