Ripple is planning to integrate its new stablecoin into the billion-dollar transaction market in order to provide users with a better experience, lower fees, and faster settlement. However, Ripple’s Chief Technology Officer, David Schwartz, clarified that this move will not eliminate the role of XRP in the ecosystem. Users who find XRP beneficial for payments and transfers will still have access to it.
There has been much speculation about Ripple’s upcoming stablecoin, set to be launched later this year on the XRP Ledger. Some experts predict that it will drive up the price of XRP to over $10, as the ecosystem becomes a central hub for the multi-trillion-dollar payments market. However, there are concerns that this could have a negative impact on the XRP market. Schwartz recently addressed these concerns.
The forthcoming stablecoin will be pegged 1:1 with the US dollar, putting it in direct competition with Circle’s USDC and Tether’s USDT. Nevertheless, Ripple is confident that its extensive network and decade-long 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 a choice between one or the other. In response to a question from an XRP enthusiast, Schwartz explained that Ripple believes in a horses-for-courses approach, where different solutions are suited to different needs.
Ripple’s goal is to encourage the use of payment software that can settle with XRP. However, if another solution proves to be more beneficial, users are free to diversify. Schwartz emphasized that Ripple doesn’t want to impose XRP on users if it doesn’t offer the best experience or economics.
In terms of payments, it is logical to assume that a stablecoin would be more favorable than XRP, especially since both rely on the XRP Ledger for transaction processing. However, Schwartz offered a different perspective, stating that for cases where the intermediary asset is not held for long, the stablecoin doesn’t necessarily have any inherent advantage. Factors such as liquidity and availability of on/off ramps will play a significant role in determining the most suitable option.
As of now, XRP is trading at $0.524, showing a 5% increase over the past week despite sideways trading in the last two days.
