- The World Bank highlighted XRP’s ability to simplify cross-border payments by classifying it as a stablecoin.
- Even with the World Bank’s categorization, XRP’s volatility calls into doubt whether it is a reliable payment method.
The World Bank’s research paper from November 2021 has rekindled both enthusiasts’ and specialists’ interest and conversation. The report, entitled “Central Bank Digital Currencies for Cross-Border Payments,” explores the increasing initiatives to improve the efficacy and economicalness of international transactions.
One notable feature of the report is its categorization of Ripple’s XRP as a stablecoin, an attribute that emphasizes the practicality of the digital currency in enabling more efficient international transactions. It echos earlier coverage by ETHNews.
XLM and XRP: Exceeding Conventional BankingÂ
According to the World Bank’s report, stablecoins are notable for their capacity to provide immediate transaction processing and ensure the security of financial transactions.
Digital assets are highly regarded for their stability when compared to fiat currencies, which renders them an appealing alternative for expediting and diminishing the expenses and durations linked to conventional banking approaches when conducting international transactions.
Within this particular framework, the World Bank bestowed recognition not only upon XRP but also upon Stellar’s XLM, attributing these assets the ability to facilitate expedited and more streamlined international transactions, thus classifying them as stablecoins.
The classification of the World Bank has reemerged in crypto community discourse, most notably due to the contributions of former Ripple director Sean McBride and XRP community figure Wrathof Kahneman.
The aforementioned dialogues have not only prompted a reexamination of the World Bank’s conclusions but have also generated conjecture regarding Ripple’s prospective undertakings, specifically the likelihood of launching its own stablecoin subsequent to its recent custody acquisitions. Kahneman state:
“At what point does #ripple issue their own stablecoin? Do the custody acquisitions suggest it? Use it in AMM LPs, put it on exchanges with much greater acceptance and compliance than USDT/USDC?”
The discussion pertaining to Ripple’s stablecoin is extensive, encompassing proposals such as its inclusion in the liquidity pools of Automated Market Makers (AMMs) and its listing on exchanges that uphold more stringent compliance criteria.
Previously, the eagerness surrounding the potential introduction of Ripple’s stablecoin was perceived as a calculated maneuver to capitalize on the $150 billion market, which ETHNews previously reported could significantly increase the adoption of XRP.
Stability vs. Volatility
Given XRP’s well-known stability and proven efficacy in payment systems, which the World Bank has acknowledged, some members of the community question the need to depart from it.
However, notwithstanding the classification of XRP by the World Bank and the utility it is attributed to, apprehensions regarding its volatility endure.
These concerns underscore a discerning perspective among members of the community, drawing attention to the intrinsic instability that XRP, similar to numerous other cryptocurrencies, encounters.
As of the publication of this article, the price of XRP was roughly $0.5956, up 0.86% from the day before. Over the past week, this token has lost more than 5% of its value, showing its volatility, which some claim weakens its promise as a dependable payment medium.
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The ongoing discourse concerning XRP and its categorization as a stablecoin by the World Bank gives rise to substantial inquiries concerning the prospective developments of cryptocurrencies with regard to international transactions.