On Tuesday, Ripple's stablecoin for payments will be accessible for trading.

Ripple's new stablecoin will be available for trading starting Tuesday, as the New York State Department of Financial Services granted its approval earlier this month.

Ripple USD, a stablecoin backed by the US dollar, will be launched on both the Ethereum blockchain and XRP Ledger. It will initially be accessible on select global exchanges, with plans to expand to more in the near future. It will not be available on Binance or Coinbase at first.

"Jack McDonald, Ripple's senior vice president of stablecoins, stated that the growth in cross-border payments is a significant factor in their desire to launch a stablecoin. As they have observed the benefits of using stablecoins in their operations, they believe that having their own native stablecoin would be more cost-effective and operationally efficient."

The Securities and Exchange Commission, under Gary Gensler's leadership, famously made an example of Ripple in a 2020 lawsuit that claimed the company was selling XRP as an unregistered security offering. A judge handed Ripple a partial win last year, ruling that although XRP is a security when sold to institutions, it is not a security when sold to retail investors on exchanges.

The market cap for dollar-backed stablecoins has increased by 50% this year and 15% since the election. Tether () holds approximately 70% of the market, while Circle-issued accounts for about 20%.

McDonald stated that the market feedback indicates that people are seeking an alternative to the current incumbents, although it may not be a complete replacement. He also mentioned that there is concern about market concentration, which is being closely monitored by regulators and new institutions.

Ripple, a 12-year-old business-to-business payments firm, primarily seeks to have a stablecoin to complement its existing business, according to McDonald.

"In our payments business, we have been a mentor for other stablecoins and have utilized XRP where appropriate. We will continue to use both XRP and stablecoins in our payments."

The XRP Ledger's native token, XRP, was created by Ripple's founders in 2012 and is used by the company in its cross-border payments business, which accounts for about 95% of its transactions and makes it the largest holder of XRP coins.

"The launch of RLUSD on both Ethereum and the XRP Ledger increases the demand for XRP as a bridge asset on the XRP Ledger, which in turn makes more credible assets that trade on the decks within the XRP Ledger beneficial for XRP."

Earlier this year, Ripple announced plans to introduce a stablecoin to the growing crypto sector, which had already been expanding before the election. In November, several crypto exchanges and fintech companies, including Robinhood, Kraken, Galaxy Digital, MercadoLibre, and Revolut, revealed plans to launch a joint dollar-backed stablecoin, USDG, on a "Global Dollar Network."