Ripple announced on Thursday that it will acquire stablecoin payments platform Rail for $200 million. This move comes just weeks after U.S. President Donald Trump signed a law that is expected to pave the way for cryptocurrency tokens to become more mainstream.
Ripple, a leading crypto company and the issuer of both the XRP token and its own stablecoin called RLUSD, has been heavily investing in stablecoin infrastructure in recent months. The acquisition, which is expected to close in the fourth quarter pending regulatory approval, will allow Ripple and Rail to “deliver the most comprehensive stablecoin payments solution available in the market,” according to the company.
“As regulations become clearer and the space has grown and matured, this opportunity for stablecoin payments is really ripe, and the acquisition of Rail just really solidifies our market leadership in stablecoin payments,” said Monica Long, president of Ripple, in an interview.
Cross-border payments
Toronto-based Rail, which is backed by Galaxy Ventures and Accomplice, uses stablecoins for cross-border payments. The company claims its transactions are cheaper and can clear in a matter of hours, a significant improvement over the longer settlement times associated with traditional fiat payments. Rail also states on its website that it is responsible for 10% of all global stablecoin-based payment activity.
In July, President Trump signed the country’s first major crypto law focusing on stablecoins, which analysts believe could allow digital assets to be used for everyday payments and money transfers. Stablecoins are a type of cryptocurrency designed to maintain a constant value, typically by being pegged 1:1 to a fiat currency like the U.S. dollar. Their use has exploded, particularly among crypto traders moving funds between different tokens.
This is not Ripple’s only recent major acquisition. In April, the company announced a $1.25 billion deal to buy multi-asset prime broker Hidden Road, which it said would enhance the utility of RLUSD. Ripple launched RLUSD, its U.S. dollar-pegged stablecoin, last year with the goal of competing in a market currently dominated by Tether and Circle’s USDC.
