Ripple’s Acquisition of Rail

By Hannah Lang

(Reuters) – Ripple has announced its plan to acquire stablecoin payments platform Rail for $200 million. This move follows the recent signing of a law by U.S. President Donald Trump, which has raised hopes that cryptocurrency tokens will soon enter mainstream finance.

Ripple, a prominent crypto company linked with the token XRP and the issuer of the stablecoin RLUSD, has made significant investments in stablecoin infrastructure recently.

Acquisition Details

The acquisition, set to close in the fourth quarter of the year pending regulatory approvals, will empower Ripple and Rail to provide the most extensive stablecoin payments solution available on the market. Additionally, it will enhance Ripple’s existing payments capabilities by incorporating virtual accounts and automated back-office processes.

Monica Long, President of Ripple, expressed that as regulations become clearer and the space matures, the opportunity for stablecoin payments has reached a critical juncture. She emphasized that the acquisition of Rail solidifies Ripple’s leadership in this emerging sector.

About Rail

Based in Toronto, Rail is supported by Galaxy Ventures and Accomplice. The platform utilizes stablecoins for cross-border payments, boasting cheaper transactions that can settle in hours, a significant improvement over the longer settlement times associated with fiat payments. Rail claims responsibility for 10% of global stablecoin-based payment activities.

In July, Trump’s signing of a bill to create a federal regulatory framework for stablecoins has been viewed by analysts as a factor that could encourage the integration of digital assets into everyday transactions.

Stablecoins, designed to maintain a stable value (typically pegged 1:1 to the U.S. dollar), have witnessed significant growth, particularly among crypto traders transferring funds between tokens.

In April, Ripple also announced its intention to acquire multi-asset prime broker Hidden Road in a deal worth $1.25 billion, one of its largest deals aimed at enhancing the utility of RLUSD.

Ripple launched RLUSD, pegged to the U.S. dollar, last year to compete against market leaders Tether and Circle’s USDC. As reported by crypto data provider CoinGecko, RLUSD has a market cap exceeding $611 million, compared to Tether’s market cap of over $164 billion.