XRP is the most convenient choice of bridge currency compared to such stablecoins as RLUSD, according to Ripple CTO David Schwartz.
David Schwartz, the Chief Technology Officer of Ripple, has elucidated the rationale behind selecting XRP as the preferred currency for international remittances. According to him, its liquidity and neutrality are not the only reasons it is beneficial as a payment and on the chain. Schwartz responded to inquiries regarding the adoption and future applications of XRP by elaborating on the significance of XRP in a world characterized by the presence of multiple currencies, in which no singular stablecoin is widely used.
XRP’s Neutrality and Liquidity Provide It with an Advantage Over Stablecoins, Says Schwartz
Andrei Jikh, a financial YouTuber, recently inquired why XRP has not experienced any form of on-chain billion-dollar trading volume, even though it has existed for over a decade and has received institutional support. Despite the growing competition from stablecoins, such as RLUSD, Ripple CTO David Schwartz provided significant reasons why XRP remains the foundation of Ripple’s payment strategy in his response.
Schwartz discussed in an X post that there may not be as much of a need to bridge the assets with a singular dominant stablecoin in the future. Nevertheless, the current environment of numerous fiat-backed stablecoins presents an opportunity for XRP.
XRP can serve as a neutral intermediary in tokenized assets, cross-border settlements, and loan markets, given the presence of numerous currencies on a global scale. He underscored that the volatility of XRP is less significant because it is less time-consuming to maintain during a transaction.
Consequently, the degree of exposure to price fluctuations is reduced. This is why an expert has predicted that the GENIUS Act will result in the RLUSD and XRP gaining a significant advantage over Tether’s USDT.
Schwartz explained that liquidity providers must maintain XRP to facilitate trades when asked why anyone would retain it if it is merely a bridge. He also stated that institutions uncertain about the asset they will require next are more likely to retain XRP due to its deep liquidity and utility as an exchange medium.
The interoperability of XRPL renders it suitable for institutional adoption
Schwartz also addressed more extensive adoption concerns. He noted that traditionally, institutions have preferred off-chain transactions due to the ambiguity surrounding regulation and the trust issue associated with decentralized systems.
Ripple’s decentralized exchange (DEX) has yet to surmount obstacles due to the absence of safeguards against its misuse by hazardous entities. He stated that the token’s on-chain usage would be strengthened due to future permission features that would mitigate those issues.
In addition, Schwartz elaborated on the potential for firms like BlackRock to contemplate utilizing the XRP Ledger (XRPL) instead of creating their proprietary chains. He drew comparisons between how USDC operates on multiple networks and the scalability and interoperability that XRPL offers.
He thought a scalable, chain-agnostic platform is necessary for global asset tokenization, a quality that XRPL possesses. Schwartz emphasized that the XRP Ledger does not restrict participation based on nationality in response to the geopolitical issues.
This explanation is consistent with experts’ argument that XRP and RLUSD are complementary and that XRP’s increasing role in development is significant. As per Schwartz, adoption will ultimately be stimulated by neutrality, utility, and openness.