Ripple plans to integrate its upcoming stablecoin into the billion-dollar transaction market, offering users a more efficient experience with lower fees and faster settlement. However, Ripple’s CTO, David Schwartz, assures that this move will not eliminate the role of XRP in the ecosystem, as those who find the cryptocurrency most beneficial for payments and transfers will still have access to it.
The introduction of Ripple’s stablecoin has generated much discussion, with some speculating that it could drive the price of XRP above $10 and position the ecosystem as a major player in the multi-trillion-dollar payments market. However, there are concerns that this could impact the XRP market. David Schwartz recently addressed these concerns.
The upcoming stablecoin will be pegged 1:1 with the US dollar and will directly compete with Circle’s USDC and Tether’s USDT. Nevertheless, Ripple is confident that its extensive network and years of experience will give the new token a competitive edge.
But what does this mean for XRP? According to Schwartz, it doesn’t have to be an either-or scenario. In response to a concerned XRP enthusiast, he emphasized Ripple’s belief in a tailored approach, where different solutions suit different needs.
Schwartz explained that Ripple aims to bring the payments market into the XRPL ecosystem, where transactions can be settled in XRP whenever it is most advantageous. However, if users’ needs change, they are free to diversify their options. He stressed the importance of not forcing XRP on users if it is not the best solution, as this would result in an inferior experience and unfavorable economics.
In terms of payments, it may seem logical to assume that XRP would not be superior to a stablecoin, especially since both rely on the same XRP Ledger for transaction processing. However, Schwartz offered a different perspective, suggesting that for cases where the intermediary asset is not held for long, a stablecoin may not have any inherent advantage. Factors such as liquidity and the availability of on/off ramps would play a significant role in determining the preferred solution.
Currently, XRP is trading at $0.524, experiencing a 5% increase over the past week despite sideways trading in the last two days.
