In a recent interview on The Scoop podcast, Ripple President Monica Long addressed the rationale behind creating the RLUSD stablecoin, particularly given XRP’s established role in facilitating cross-border transactions.
Long emphasized that XRP and RLUSD serve complementary purposes, catering to the distinct needs of payment providers and developers within the Ripple ecosystem.
RLUSD: A Tailored Solution for Payment Utilities
For payment utilities, RLUSD offers a cost-effective alternative for specific transactions. Long highlighted scenarios where established currency pairs, like USD/EUR, boast ample market liquidity. In such cases, utilizing XRP as a bridge asset might be unnecessary.
Moreover, Ripple acknowledges the vision of XRP Ledger (XRPL) resource consumers who view XRP as a neutral settlement mechanism for various tokenized assets. This aligns with Ripple’s long-standing advocacy for XRP as a bridge asset for the future “Internet of Value,” where diverse assets exist on the blockchain.
However, Long underscores XRP’s continued importance for efficient cross-border settlements, especially for transactions involving less common currencies or those plagued by insufficient liquidity. In regions like sub-Saharan Africa, Europe, and the Middle East, transaction fees can surpass 10% due to these factors. In such scenarios, XRP’s role in facilitating cost-effective settlements becomes critical.
Empowering Developers with RLUSD
For developers, RLUSD addresses a separate need. Traditionally, the US dollar has served as the primary on-ramp for the cryptocurrency industry, acting as the starting point for acquiring other cryptocurrencies or tokenized assets.
Recognizing the immense potential of the XRPL’s decentralized exchange (DEX), Long acknowledges the necessity of high-quality stablecoins to enhance its appeal to developers. This focus on DeFi (Decentralized Finance) aligns with Ripple’s strategy, with USD stablecoins envisioned as a cornerstone of this ecosystem.
Why RLUSD Complements XRP: A Community Perspective
The recent discourse surrounding RLUSD’s complementary role to XRP has garnered considerable interest within the XRP community. Vet, a dUNL validator on the XRPL, offered valuable insights during the interview, emphasizing that RLUSD’s introduction is intended to bolster XRP’s utility rather than diminish it.
Similarly, previous interviews featuring other Ripple executives, including CTO David Schwartz, have echoed this sentiment. They have consistently maintained that the forthcoming stablecoin will augment XRP’s functionalities within the RippleNet network.
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By introducing RLUSD, Ripple strategically expands its toolkit to cater to the evolving needs of its client base. While XRP remains a cornerstone solution for efficient cross-border settlements, particularly for transactions involving less common currencies, RLUSD offers a cost-effective alternative for transactions involving major currency pairs with ample liquidity.
Additionally, RLUSD empowers developers by providing a high-quality stablecoin that fuels the growth of the XRPL’s DEX and the burgeoning DeFi ecosystem within RippleNet.
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. Times Tabloid is not responsible for any financial losses.
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