David Schwartz, CTO of Ripple Labs, provided clear and rare insights into the factors driving XRP's price in the long term, despite the company recently focusing on the new stablecoin RLUSD. In a recent exchange with an XRP supporter on social media, Schwartz emphasized that this cryptocurrency continues to be core to Ripple's payment infrastructure, especially as the primary bridge asset in cross-border remittance transactions.
The Role of XRP as a Bridge Asset Remains Central
While RLUSD plays a specific role, Schwartz reveals that the utility of XRP in real-world financial use cases will ultimately drive its value. His comments reaffirm Ripple's long-term plans for the digital asset, relying on XRP due to its proven liquidity and integrated role on the ledger as Ripple explores other digital options.
In his response, Schwartz directly addressed the growing speculation that the company may be shifting focus away from XRP to the new stablecoin, while asserting that this digital asset remains Ripple's cross-currency monetary asset, enabling fast and low-cost currency transactions. Although Schwartz did not share exact data, he believes that the level of use of this token 'outperforms all other assets' in Ripple's system.
XRP is tied to how the XRP Ledger operates, thus, boosting ledger activity will almost certainly drive demand for this cryptocurrency token higher, thereby increasing its value as it becomes more essential in the global financial workflow.
Schwartz argues that as the practical adoption of the Ripple blockchain network increases, the demand for XRP will also rise. The potential demand, as more businesses and developers build on XRPL, could be the core driver of XRP's future value.
Ripple CTO: Supporting Stablecoin, XRP Maintains
Some community members are concerned that Ripple's new stablecoin RLUSD, launching in December 2024, may replace this cryptocurrency token, but Schwartz clarifies that stablecoins and XRP serve different purposes. He stated that stablecoins like RLUSD are more suitable for use cases that require fixed value, such as when companies register collateral or need to enter and exit the market without facing significant price volatility.
Volatility in the cryptocurrency market can cause disruptions in these cases, and stablecoins avoid this issue by maintaining stable prices. However, Schwartz believes that for most other applications, particularly those related to real-world finance and long-term holding, digital assets like XRP remain the better option. He notes that unless extremely risk-averse, most long-term users are likely to prefer holding this leading digital asset over cash due to its price appreciation potential and its positive role in the blockchain ecosystem.
The CEO of Ripple added that as more organizations begin using XRPL for financial use cases, the role of XRP in facilitating fast remittances becomes increasingly important, especially in volatile markets where stablecoins may not be ideal.
Schwartz made a subtle yet important distinction, stating that XRP's position on XRPL is privileged. This means that this cryptocurrency token is less likely to be replaced or exploited, providing a long-term advantage that many other tokens may not have.