American fintech company Ripple Labs Inc. has added a fairly unexpected acquisition to its stablecoin platform framework by acquiring Rail on August 7. The agreement is reported to be worth $200 million and finely poises Ripple’s overall position in the industry.
Ripple is one of the leading platforms that deals with global stablecoin markets. They issue RLUSD, which is pegged at a 1:1 value to the US dollar, and intend to help financial institutions integrate blockchain, cryptocurrency, and digital assets into their business models.
This business partnership sees Ripple make use of Rail. This Toronto-based crypto platform facilitates instant and global payments of cryptocurrencies, in its expansion and bid to solidify its position as a top stablecoin-using platform.
The deal comes off the back of an increase in favor of cryptocurrencies in America in the last few months, thanks to a continued boom in the digital asset world and the Trump administration signing the GENIUS Act into law just a few weeks ago. Cryptocurrencies of all kinds have taken a boost in their worth accordingly, reflecting this huge regulatory and legislative change, which has boosted the digital economy worldwide. It has had a knock-on effect on all sorts of digital assets from crypto fintechs such as Ripple and Rail to those using cryptocurrencies at online casinos and even those looking for the next big and best meme coin, particularly those dealing in stablecoins.
As crypto looks set for a major bull run, all sorts of investors will be searching for their niche in the market to make the most of any kind of surge. For Ripple, they will hope that the new investment in Rail will allow them to facilitate a wider audience and attract more global users of the platform. For other participants in the digital economy, it could mean looking to pounce on the next big meme coin, like the ones identified by ICObench writer Minwoo Kim (source: https://icobench.com/kr/cryptocurrency/best-meme-coins/).
What This Deal Means For Ripple
This deal has been hailed by the Ripple President, Monica Long, as their chance to steer the next phase of stablecoins worldwide. Stablecoins have recently become hugely popular due to their predictability and immunity to the volatility that many often associate with cryptocurrencies. They are also rapid and have fewer fees than other financial transactions. The combination of qualities offered by stablecoins allows investors in stablecoin cryptocurrencies to use the currency to benefit other areas of DeFi businesses or businesses looking to expand their digital assets moving forward.
Monica Long went on in her statement, following the acquisition earlier, to advise that stablecoins continue to cement themselves as the cornerstone of the modern age finance industry. It seems that Ripple’s goal is to help businesses worldwide adopt stablecoins into their business models and use the blockchain for global payments, swaying from traditional fiat currencies in the process. The company includes a huge network of payouts and access to digital asset liquidity through Ripple Payments.
Whilst RLUSD is worth less than 1% of the whole stablecoin market and is thought to be worth around $612 million out of a $270 billion market, this deal allows Ripple to set themselves apart from competitors, add extra tech advances from Rail and continue to grow their platform which in turn should theoretically grow crypto worldwide through business usage.
What The Deal Means For Rail
Rail has been slowly building its platform over the last 4 years and has managed to become an effective service used by more than 12 banks. It offers a seamless platform to its customers so they can effectively, quickly, and safely move their cryptocurrencies globally. It is backed by Galaxy Ventures and Accomplice and has managed to secure 10% of the global stablecoin payments. Rail has developed a business model that has created one of the fastest ways to liquidate business crypto payments internationally. It continues to thrive and is sure to be a welcome addition to the Ribble platform. Rail will complement Ribble by providing virtual accounts and automating office processes, which increases efficiency and streamlines operations for global businesses. In essence, Rail is providing a service that simplifies business payments by using a stablecoin.
The CEO of Rail, Bhanu Kohli, stated, as part of her comments following Ribbles’ acquisition, that the two businesses share visions and, combined, can bring innovation to the global digital economy, helping businesses move money around the globe.
What Does This Deal Tell Us About The Wider Crypto Market?
This deal shows the combination of two very innovative crypto fintech businesses, which are leading the crypto revolution and aiming to solidify digital economies around the world. They aim to integrate businesses into the wider digital financial framework with a view to turning crypto into the mainstream moving forward, pushing aside traditional fiat currencies. For these companies, this means people from countries across the globe having access to decentralized finances with high security and rapid transactions.
However, this deal comes fresh off the back of Trump’s GENIUS Act order, which is distinctly aimed at allowing crypto, and in particular USD-pegged stablecoins, to consolidate their power and essentially propagate the global wealth of the U.S dollar. The Act has sparked a flurry of activity in the digital economy and spiked many cryptos, who are predicting that the Act is the beginning of a pathway of regulatory clarity and crypto prosperity. As stablecoins rely upon the consistency of fiat currencies, and in particular, the USD, they can be limited in their capital growth. Many in the crypto economy remain positive but have doubts about the path the government may take, which may only focus on stablecoins.
