Ripple to Buy Stablecoin Payments Platform Rail for $200 Million
Ripple is planning to buy stablecoin payments platform Rail for $200 million weeks after U.S. President Donald Trump signed a law that raised expectations that cryptocurrency tokens are about to enter the mainstream. Ripple, a cryptocurrency firm linked with the XRP token and issuing its stablecoin RLUSD, has made significant investments in stablecoin infrastructure lately.
The acquisition - set to finalize in the fourth quarter of this year, subject to regulatory approvals - will allow Ripple and Rail to provide the most extensive stablecoin payments solution offered in the market.
According to the company, it will incorporate virtual accounts and automated back-office processes into Ripple's current payment functionalities.
"As regulations become clearer and the sector has developed and evolved, the opportunity for stablecoin payments is truly promising, and acquiring Rail cements our leadership in stablecoin payments," stated Monica Long, president of Ripple.
Rail, based in Toronto and supported by Galaxy Ventures and Accomplice, utilizes stablecoins for international payments. It claims its transactions cost less and can be settled in just hours, unlike the longer processing times for fiat payments.
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Rail's website states that the firm accounts for 10 percent of the total global payment activity involving stablecoins.
In July, Trump enacted a law aimed at establishing a federal regulatory framework for stablecoins, which experts indicated might enable digital assets to transform into a common method for payments and transferring funds.
Stablecoins aim to hold a stable value, typically pegged at 1:1 to the U.S. dollar, and their adoption has surged, particularly among crypto traders shifting assets between tokens.
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In April, Ripple announced it would purchase multi-asset prime broker Hidden Road for $1.25 billion, marking one of its major acquisitions to improve RLUSD's functionality.