This collaboration will explore using Ripple’s RLUSD stablecoin on the XRP Ledger to process Gemini credit card transactions.
Ripple on Wednesday announced a partnership with Mastercard, Webbank, and global cryptocurrency platform Gemini to explore the use of RLUSD, a U.S. dollar-backed stablecoin, to settle transactions on Gemini credit cards.
According to a press release seen by The Defiant, the project aims to test the use of RLUSD on the XRP Ledger (XRPL) to process payments between Mastercard and card issuer WebBank.
According to DeFiLlama data, RLUSD’s market capitalization is currently over $1 billion. Approximately 80% is on Ethereum and 20% on XRPL, with total value locked (TVL) currently exceeding $77.7 million.
If all goes as planned, this will be one of the first instances of a regulated U.S. bank settling traditional card transactions with a regulated stablecoin on a public blockchain, the release states.
“Through our partnerships with Ripple, Gemini and WebBank, we are leveraging global payments networks to bring regulated, open-loop stablecoin payments into the financial mainstream,” said Shelly Haymond, Global Head of Digital Commercialization at Mastercard. “Guided by our commitment to consumer choice and a principled approach to blockchain that emphasizes strong consumer protections, a level playing field, and full regulatory compliance, we are enabling payments today while exploring how stablecoins can support future use cases.”
This effort continues Ripple’s work with Gemini Credit Card, which launched its XRP edition earlier this year. The team says this work has the potential to highlight how stablecoins can enable fast and efficient payments while meeting regulatory requirements.
According to DeFiLlama, stablecoins are currently a $306 billion industry, with market capitalization increasing 47% since the beginning of the year. Tether’s USDT has a market capitalization of over $183 billion and maintains a 60% market share.
RLUSD was approved by the New York Department of Financial Services (NYDFS) late last year and is fully backed by cash and cash equivalent reserves. XRPL, which uses XRP as its native token, will serve as the payment platform. According to The Defiant’s price page, XRP is currently trading at $2.28, up 1.2% on the day.
Next steps include bringing RLUSD to XRPL and integrating it into Mastercard and WebBank payment processes in the coming months, pending regulatory approval.
News of the partnership comes hours after Ripple earlier today announced a $500 million strategic investment led by affiliates of Fortress Investment Group and Citadel Securities, valuing the company at $40 billion.
Other investors include Pantera Capital, Galaxy Digital, Brevan Howard, and Marshall Wace.
“This investment reflects both Ripple’s incredible momentum and further validation of the market opportunities we are actively pursuing with the world’s most trusted financial institutions,” Ripple CEO Brad Garlinghouse said at the time of the announcement.