- Some doubt XRP’s suitability compared to the stablecoin, considering factors like transaction duration and liquidity.
- Ripple prioritizes XRP adoption for its superior user experience and economic benefits, alongside liquidity considerations.
Ripple’s upcoming stablecoin has led to discussions about its potential impact on the use of XRP in Ripple’s On-Demand Liquidity (ODL) transactions.
Concerns have arisen among some members of the XRP community that the stablecoin could replace XRP as the preferred bridge currency for cross-border payments.
David Schwartz, has tackled these concerns head-on, highlighting the crucial need to advocate for payment solutions that seamlessly settle transactions using XRP.
The idea is to get people using payment software that *can* settle with XRP. Then there's no reason for them not to settle with XRP where it works best. It would be kind of silly to try to get people to use a solution where it's inferior. 1/2
— David "JoelKatz" Schwartz (@JoelKatz) April 24, 2024
He underscored Ripple’s primary objective, which is to eliminate any obstacles hindering the utilization of XRP in situations where it presents the most efficient resolution.
Schwartz emphasized the counterproductive nature of endorsing a payment method less effective than XRP for settlement, particularly given that half of ODL transactions presently rely on XRP.
However, there are still concerns among some community members about when XRP would be the optimal choice for settlement compared to the stablecoin.
For cases where you don't hold the intermediary asset for very long, the stablecoin doesn't really have any inherent advantage. It will likely come down to issues like liquidity and availability of on/off ramps.
— David "JoelKatz" Schwartz (@JoelKatz) April 24, 2024
Schwartz noted that the appropriateness of XRP compared to the stablecoin hinges on several factors, including the duration for which a bridge asset is retained during transactions.
Factors such as liquidity and the accessibility of on/off ramps could sway the decision between the two assets, particularly in instances where the bridge asset isn’t held for an extended period.
Ripple seeks to encourage the usage of XRP in situations where it offers optimal user experience and economic advantages, while also taking into account aspects such as liquidity and transaction duration.
