News of Ripple's upcoming launch of a USD-backed stablecoin has raised concerns about the future of XRP, the native cryptocurrency of the XRP Ledger. At the same time, some fear that the stablecoin could overshadow its role within the ecosystem. However, one of the leading cryptocurrency researchers, Krippenreiter, said that the unique features and benefits of XRP will remain intact despite the stablecoin rollout.
How is Stabecloin different from XRP?
Addressing these concerns, Krippenreiter explained that although stablecoins and XRP serve different purposes, they coexist within the cryptocurrency ecosystem.
Unlike stablecoins, which maintain a stable value tied to real-world assets such as the US dollar, they are inherently dependent on issuers, institutions, or specific jurisdictions. While XRP acts as a globally neutral token on the XRP ledger, reducing counterparty risk and providing transparency through its transparent ledger.
Furthermore, while stablecoins face fragmentation across different platforms and chains, XRP remains a unique coin in XRPL with its built-in decentralized exchange (DEX).
Additionally, Krippenreiter emphasized the growing trend of de-dollarization, noting that stablecoins pegged to the US dollar may face challenges if confidence in the dollar diminishes.
Furthermore, XRP's independence and adaptability distinguishes it from stablecoins, which are subject to rules set by its issuers. Unlike stablecoins, changes to the supply of XRP require consensus among participants on the XRP ledger, ensuring transparency and decentralization.
It's not the end of XRP
Despite the concerns, Krippenreiter believes that XRP will maintain its prominent position in the cryptocurrency space. He pointed to the large size of the stablecoin market, which dominates 51% of the Ethereum network and decentralized exchanges.
Given the increasing dominance of stablecoins in the cryptocurrency space, Krippenreiter believes that Ripple's stablecoin project could be a success. He believes the new XRPL AMM functionality will lead to the launch of AMMs with currency pairs that include XRP and the Ripple stablecoin.
Ripple delay in liquid stablecoin
Mr. Hopper, an on-chain analyst, had previously questioned Ripple's delay in introducing a liquid stablecoin on XRPL despite years of network development. Some have speculated that Ripple's decision to continue leveraging XRP for cross-border settlements signals its long-term commitment to digital assets.
However, Krippenreiter believes that the introduction of the Ripple stablecoin does not necessarily signal the end of XRP. He emphasized the fundamental differences between stablecoins and XRP, and highlighted the unique features that set XRP apart.
