XRP has officially joined the growing list of cryptocurrencies backing Ethena Labs’ synthetic stablecoin, USDe, as part of the platform’s strategy to scale its stablecoin supply to $20 billion.

How the Collateral Expansion Strengthens USDe

Ethena Labs recently introduced a new Eligible Asset Framework to determine which cryptocurrencies can be used to collateralize USDe. With this update, high-liquidity tokens like XRP, BNB, and Hyperliquid’s HYPE have been approved as viable collateral assets.

This framework is designed to ensure that all assets included in USDe’s collateral basket maintain robust market liquidity. As explained by the Ethena Risk Committee, assets must meet specific conditions: a minimum of $1 billion in open interest over two weeks, a daily trading volume of at least $100 million across spot and perpetual markets, and sufficient depth on order books—defined as $500,000 in spot depth and $10 million in perpetual depth averaged over a fortnight.

The high standards are intended to minimize slippage and execution issues during times of portfolio rebalancing. While all three tokens met the requirements, Ethena Labs noted that actual integration may not be instantaneous. Among these additions, BNB is leading as the first token to be actively used for collateral under the updated rules.

Ethena Labs strengthens USDe’s ecosystem by incorporating high-liquidity assets like XRP and BNB as collateral.

Targeting a $20 Billion Milestone

Guy Young, the founder of Ethena Labs, expressed confidence in the platform’s future, suggesting that USDe’s total circulation could surpass $20 billion in the near term. According to Young, the stablecoin experienced significant growth during the latter half of 2024, when interest-rate spreads on U.S. Treasury bills spiked from near zero to over 20% within weeks due to monetary easing by the Federal Reserve.

With that momentum behind it, Young predicts another surge could occur if similar macroeconomic conditions arise, potentially pushing USDe past the $20 billion supply mark within a month. As of now, the token has already gained notable traction, holding a circulating supply of $11.8 billion.

XRP’s Role in the Broader Strategy

XRP’s inclusion is significant, given its deep market liquidity and longstanding presence in global remittance markets. By allowing XRP to serve as collateral, Ethena Labs is leveraging the token’s strong infrastructure and consistent trading volume to stabilize USDe’s value.

This move not only diversifies USDe’s collateral pool but also adds credibility to the synthetic dollar protocol by linking it with established assets. XRP joins a carefully curated selection of backing tokens that aim to mitigate risk, enhance stability, and support scalability.

USDe’s Position in the Stablecoin Arena

In addition to broadening its collateral framework, Ethena Labs has achieved another key milestone: getting USDe listed on Coinbase, expanding its accessibility in the United States. This is a notable step in its aim to become a leading decentralized stablecoin not reliant on traditional banking intermediaries.

By supply size, USDe ranks third in the stablecoin market behind Tether (USDT) and USD Coin (USDC), marking it as a major contender in the decentralized finance ecosystem. With a combination of strong tokenomics, diversified asset backing, and growing exchange support, USDe’s growth trajectory appears firmly upward.

Related: XRP Price: $12M Max Pain for Bears

For more insights, check the announcement from Ethena Labs here and Guy Young’s growth outlook here.