Ripple to Boost Stablecoin, XRP Payment Services With $200 Million Rail Acquisition

In brief

Ripple has agreed to acquire Rail for $200 million.
The Canadian stablecoin platform has key compliance features.
The companies will promote RLUSD and XRP’s use in payments.

Ripple has entered into a $200 million agreement to purchase Rail, a Toronto-based payments platform, the tech firm said in a press release on Thursday.

The acquisition will allow Ripple to deliver a comprehensive stablecoin payments services ,the company said, noting that Rail will provide Ripple with the ability to offer so-called virtual accounts while streamlining operations.

“This acquisition underscores our commitment to helping our global customer base move money wherever and whenever they need,” Ripple President Monica Long said in a statement. “Stablecoins are quickly becoming a cornerstone of modern finance.”

Ripple said the companies will be focused on payment ramps that allow customers to swap between stablecoins and traditional payments formats. Virtual accounts allow customers to transact in digital assets without needing to create a digital wallet.

Rail has over 12 banking partners, and the company services fintechs, payment providers, neobanks, and enterprise organizations, according to the press release. Dedicated features for banking partners include know-your-customer workflows, compliance considerations, and transaction monitoring, according to Rail’s website.

When it comes to facilitating payments, Ripple’s RLUSD stablecoin will be supported through the acquisition, Ripple said, as well as the cryptocurrency XRP. The stablecoin has a market capitalization of $611 million since its December debut.

XRP rose 4.3% on Thursday to $3.07, according to crypto data provider CoinGecko. Still, the third largest digital asset by market cap has slumped 2.4% over the past two weeks.

Ripple has been ramping up activity in the payments space, with the passage of stablecoin legislation last month expected to supercharge the sector as big banks step in.

Ripple itself has moved toward the traditional banking system, with CEO Brad Garlinghouse saying that the company filed for a banking license with the Office of the Comptroller of the Currency in July. The company is already subject to oversight from New York regulators.

Earlier this year, Ripple acquired the crypto-friendly prime brokerage Hidden Road for $1.25 billion, while aiming to serve institutional clients on a larger scale. It was among the most highly valued deals in Ripple’s history.