Ripple CTO Makes Notable XRP Utility Clarification

The recent announcement by Ripple, a leader in blockchain payments solutions, regarding the launch of a new stablecoin has sparked discussions within the XRP community.

While the broader crypto market responded positively to the news, some XRP holders expressed concern about the potential impact of the stablecoin on XRP’s utility within Ripple’s On-Demand Liquidity (ODL) service, now known as RippleNet Payments.

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Community Questions and Legal Considerations

Concerns regarding the potential marginalization of XRP surfaced when a community member on X directly questioned Ripple CTO David Schwartz about the role of the stablecoin within the ODL payment model.

Specifically, the inquiry focused on whether the stablecoin would render XRP obsolete for facilitating cross-border transactions processed through RippleNet Payments. This highlights the apprehension among some XRP holders that Ripple might be shifting away from XRP as the primary bridge asset for cross-border transactions.

Further fueling these concerns were suggestions from legal experts. Attorney Fred Rispoli previously proposed that one possible reason for the stablecoin launch could be its use as a bridge currency for ODL partners in the United States.

Additionally, on-chain researcher Anderson, citing recently disclosed legal documents from the ongoing lawsuit between Ripple and the SEC, theorized that the San Fancisco-based blockchain firm might be looking to use the stablecoin, instead of XRP, to cater to U.S.-based ODL customers. This potential shift could be driven by the legal uncertainties surrounding XRP in the U.S., despite efforts to achieve regulatory clarity.

Ripple Prioritizes Solutions Optimized for XRP

In response to these questions and concerns, Schwartz emphasized Ripple’s commitment to fostering the adoption of payment solutions that leverage XRP for efficient settlement whenever possible. He explained the importance of eliminating any obstacles that hinder the use of XRP when it presents the most optimal solution.

Schwartz pointed out that promoting a payment method inferior to XRP settlement would be counterproductive, especially considering a report earlier this year indicating that half of all ODL transactions utilize XRP.

Schwartz’s statement reaffirms Ripple’s dedication to promoting XRP adoption in scenarios where it delivers the best user experience and economic benefits. The company’s goal is to ensure users have access to the most efficient payment solutions available, and XRP remains a core component of that strategy.

Addressing Specific Use Cases and Future Considerations

While Schwartz’s clarification provided reassurance, some community members continued to express uncertainty about the specific circumstances where XRP would be the ideal settlement option. They queried whether the stablecoin might outperform XRP in certain situations.

Schwartz acknowledged this concern, explaining that the suitability of XRP versus the stablecoin hinges on various factors, including the duration for which a bridge asset is held during transactions.

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He suggested that for scenarios where the bridge asset is not held for a prolonged period, the stablecoin might not necessarily offer significant advantages over XRP. In such cases, factors like liquidity and the ease of converting between crypto and fiat currencies (on/off ramps) could influence the choice between the two assets.

Ripple’s plan to launch a stablecoin and its commitment to XRP demonstrates its strategy of catering to diverse user needs and regulatory environments. Ripple’s transparency and multiple settlement options position it to remain a leader in the global payments industry as cryptocurrency regulations evolve.

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