Ripple’s Chief Technology Officer, David Schwartz, has put forth the argument that the upcoming Ripple USD (RLUSD) stablecoin will actually be beneficial to XRP rather than detrimental. Schwartz shared this perspective yesterday during a casual discussion at the conclusion of the XRP Ledger Apex summit in 2024.
The host of the event posed a question to Ripple executives regarding the transition from XRP to stablecoins, considering that volatile digital assets were previously seen as more suitable for DeFi activities.
Schwartz elaborated on the necessity of stablecoins, emphasizing that the evolution of the DeFi space has shown their significance as key enablers. While volatile assets have their uses, stablecoins provide stability in various scenarios. He gave an example of volatility harvesting where stablecoins are not ideal but are essential for pricing, holding funds, and trading without market exposure.
Schwartz also highlighted the importance of having multiple asset classes for DeFi participants to effectively navigate the landscape, particularly in the context of automated market makers (AMMs) requiring at least two assets for trading and liquidity.
In terms of XRP’s role in liquidity services, Schwartz pointed out its privileged position on the XRP Ledger (XRPL). He noted that pathfinding always prioritizes XRP liquidity and auto-bridging ensures trades consider XRP liquidity automatically. Schwartz concluded that XRP will continue to serve as a bridge asset on the XRPL even with the introduction of the stablecoin ecosystem, enabling more use cases.
Prominent figures in the XRP community have praised this explanation from Schwartz, with Moon Lambo, a pro-XRP YouTuber, highlighting that the RLUSD stablecoin launching on XRPL later this year is dependent on XRP’s existence.
Ripple’s CEO, Brad Garlinghouse, reiterated Schwartz’s stance, emphasizing that RLUSD complements the overall XRP ecosystem. Garlinghouse stated that Ripple’s initiatives aim to ensure success for everyone involved with XRP, with stablecoin liquidity enhancing user experience.
In conclusion, Garlinghouse emphasized that the introduction of RLUSD does not detract from Ripple’s commitment to the growth of the XRP ecosystem. Readers are advised to conduct thorough research before making any investment decisions as the content provided is for informational purposes only. The opinions expressed in the article are solely those of the author and do not necessarily reflect The Crypto Basic’s views. The Crypto Basic is not liable for any financial losses incurred.