Ripple’s Chief Technology Officer, David Schwartz, has clarified that the rise in stablecoin issuance is not a threat to XRP. Instead, he views stablecoins as supportive assets that can strengthen XRP’s global role in cross-border settlements.
According to Schwartz, stablecoins improve user access to digital assets by offering a more stable store of value. However, he pointed out that they do not eliminate the need for liquidity between different assets.
He described the fact that stablecoins tend to be geographically and regulatoryly restricted. Their relations with local legal systems offer obstacles that prevent them from operating as international tools.
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Other than being stable, Schwartz has pointed out the fact that stablecoins are not necessarily good in all places. Stablecoin can be good in the U.S. since no one doubts the stability of the dollar, but it seems to lack that in others because the risk of currency and the geographical limits of the currency can be an issue.
He pointed out that XRP is decentralized, which gives it an advantage in such cases. Unlike stablecoins, XRP is not attached to any jurisdiction, which qualifies it for neutral and trans-border settlements.
Stablecoin Growth Reinforces the Need for a Neutral Digital Asset
Schwartz stressed that each stablecoin has a counterparty bound to a specific regulatory system, making them regional tools rather than global ones. The lack of interoperability among stablecoins creates friction that XRP can help solve.
He compared XRP’s role to that of the U.S. dollar in traditional finance. Just as the dollar is often used as a bridge between smaller currencies, XRP could serve a similar purpose among various stablecoins.
Also, he observed that an increase in the number of stablecoins will not lower the demand for liquidity. In fact, it will make a neutral settlement asset even more necessary. XRP may seal that void by executing fast and efficient asset transfers across cluttered markets.
According to Schwartz, as dozens of stablecoins enter the market, the need for a decentralized bridge like XRP becomes more urgent. It is suitable for the development of the changing digital economy since it is open-structured and accessible worldwide.
Schwartz’s comments reaffirm Ripple’s confidence in XRP’s strategic importance. As attractive as some stablecoins appear to be, they can also demonstrate the shortcomings of such regional digital assets. The jurisdictionless functionality of the XRP is a factor that puts it in a position to bridge these fractured systems, which further increases its currency in international finances.
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