News that Ripple will soon launch a USD-backed stablecoin has raised concerns about the future of XRP, the native cryptocurrency of the XRP Ledger. Others, however, worry that stablecoins could overshadow their role within the ecosystem. However, prominent crypto researcher Krippenreiter argued that despite the introduction of stablecoins, XRP's unique properties and utility will remain intact.
Difference between Stabecoin and 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 pegged to a real-world asset like the US dollar, they are inherently dependent on the issuer, institution, or specific jurisdiction. Meanwhile, XRP operates as a globally neutral token on the XRP Ledger, reducing counterparty risk and providing transparency through its transparent ledger.
Additionally, while stablecoins face fragmentation across different platforms and chains, XRP remains a single currency on XRPL due to the inclusion of a decentralized exchange (DEX).
Additionally, Krippenreiter highlighted the growing trend of de-dollarization and suggested that stablecoins tied to the US dollar could face difficulties if confidence in the dollar declines. .
Additionally, XRP's independence and adaptability differ from stablecoins, which are subject to rules set by their issuers. Unlike stablecoins, changing the supply of XRP requires agreement among participants in the XRP ledger, ensuring transparency and decentralization.
XRP is not the end
Despite the concerns, Krippenreiter believes that XRP will maintain its prominence in the cryptocurrency space. He pointed to the considerable size of the stablecoin market, which controls 51% of the Ethereum network and decentralized exchanges.
Krippenreiter believes that Ripple's stablecoin project has the potential to record success given the growing dominance of stablecoins in the cryptocurrency space. He believes the new XRPL AMM feature will lead to the launch of AMM with currency pairs including XRP and Ripple stablecoin.
Ripple liquidity stablecoin delays
On-chain analyst Huber had previously questioned Ripple's slow introduction of liquid stablecoins to XRPL, despite years of network development. Some speculated that Ripple's decision to continue leveraging XRP for cross-border payments signaled the company's long-term commitment to the digital asset.
However, Krippenreiter believes that the introduction of the Ripple stablecoin does not necessarily spell the end of XRP. He highlighted the fundamental differences between stablecoins and XRP and highlighted the unique features that make XRP stand out.
