Ripple CTO Clarifies XRP Role in the Market with RLUSD About to Launch

In a recent exchange in the cryptocurrency community on X, one community member raised concerns about the potential impact of RLUSD on XRP, especially considering the overlapping functionalities of these digital assets.

RLUSD has dominated the crypto news cycle recently, as the stablecoin is close to its official launch, although many in the community believe it will help XRP, some are uncertain and believe it could replace XRP.

David Schwartz, Chief Technology Officer (CTO) of Ripple, provided a detailed response that addressed these concerns and highlighted the distinctive advantages of XRP on the XRP Ledger (XRPL).

What Role Will XRP Play With RLUSD?

DegenXRPHolder posed a question that was direct and reflected a growing apprehension. He wrote, “No more games Schwartz, tell me… will RLUSD be a net positive to $XRP? Even though it can do 70% or more of what XRP was made to do? Y’know cross border payments.”

This question highlights a fundamental issue some have with RLUSD. If the stablecoin can perform most of XRP’s tasks, why would the company continue using XRP? And if Ripple abandons the digital asset because of RLUSD, what will happen to the community?

Schwartz began by emphasizing the special position of XRP within the XRPL ecosystem. “Only XRP can be used to pay transaction fees on XRPL,” Schwartz stated.

This points to a structural necessity for XRP in any transaction on the ledger, thereby securing its continued relevance.

Furthermore, he noted that “XRP is the only asset that every account can hold and that has no counterparty or jurisdiction and cannot be frozen or clawed back.” These attributes distinguish it from other digital assets, including stablecoins like RLUSD.

Schwartz also highlighted the technological advantages of XRP, particularly features like auto bridging.

Autobridging allows XRP to be used efficiently as an intermediary in transactions involving other currencies, thereby enhancing liquidity and reducing transaction costs.

This feature is intrinsic to XRP’s design and it is a critical factor in its adoption for cross-border payments. Notably, prominent community figures have shared XRP’s advantages as the auto-bridge asset in the ecosystem.

Despite these advantages, Schwartz acknowledged a potential challenge. “If a stablecoin can do most of what XRP does better than XRP can, then XRP will lose to one or more stablecoins no matter what happens with RLUSD,” he admitted.

This reinforces Ripple’s stance of using the best asset where necessary. However, XRP plays many roles that can’t be replaced, and it is unlikely to suffer after the launch of RLUSD.

Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.

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