Opinion: Ripple (XRP) Should Remain a Bridge Between Different Stablecoins and CBDCs of Various Jurisdictions

Opinion: Ripple (XRP) Should Remain a Bridge Between Different Stablecoins and CBDCs of Various Jurisdictions

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After a deep correction, bitcoin and the market began to grow fast again. Alarmists regret the lost opportunity to buy BTC, possibly the latest in this growth cycle.

The uptrend is strongly supported by the fourth cryptocurrency Ripple (XRP) and its fork Stellar (XLM). Despite its vulnerable position in connection with the SEC lawsuit, XRP gained about 10% in a day and about 20% in a week. And this is despite the fact that the SEC refuses to recognize XRP as a cryptocurrency, and Ripple faces a ruinous lawsuit and a fine for issuing unregistered securities.

The real reason for the pressure on Ripple is that it provides the best method to launch a central bank digital currency (CBDC). If the world’s central banks go the route of issuing their CBDCs, it will destroy the dollar’s hegemony and could threaten the financial health of the United States. That is why the SEC is trying to strangle Ripple, as it had killed early Pavel Durov’s TON (Gram) project. In 2020, the XRP price grew mainly on the popularity of the CBDC idea. Now the crypto community has defended Ripple from reprisals, and it may be too early to bury XRP. In any case, the rise in the price is encouraging.

But now, a discussion about the usefulness of the Ripple platform has suddenly started. For several years, Ripple has been successfully promoting its service as the fastest and cheapest way of cross-border payments. It would seem that there is nothing to argue about. Ripple’s flagship product On-Demand Liquidity (ODL) has proven its worth. But on Twitter, there is now a discussion between Luke Martin, founder of Venture Coinist, and David Schwartz, CTO of Ripple. Luke Martin rather cheekily stated that he did not see the usefulness of XRP cryptocurrency at all:

– If it’s for payments, stablecoins are better. Even if you think it’s better for payments, there’s no incentive to hold (not store of value or income-generating).

Martin hints that XRP is practically not growing and does not provide an opportunity for holders and speculators to make money. In response, David Schwartz said that hardly any stablecoin can provide payments on a global scale. And in order to exchange one stablecoin for another, a digital bridge currency is required. But Ripple’s CTO also admits:

– If the whole world settled on one stablecoin, I’d agree with you. But stablecoins are always going to be tied to jurisdictions and counter-parties too. So it is unlikely one winner will emerge.

Schwartz delicately bypassed the issue that stablecoins are not good as a store of value because they are pegged to fiat currencies that are constantly depreciating. In this controversy, Luc Martin showed a deep misunderstanding of the crypto market and the nature of cryptocurrencies. Meanwhile, his service Venture Coinist is specialized in podcasts about crypto trading.