XRP Analyst Dispels Concerns Over Ripple Stablecoin Impact

Kelvin Munene Murithi
April 5, 2024
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In response to the Ripple’s proposal of issuing a stablecoin, backed by USD, on the XRP Ledger (XRPL) and Ethereum networks, a storm of speculating has started in the cryptocurrency community. But the main point of the debate is focused on the possible implications for XRP, the native cryptocurrency of Ripple, normally used in cross-border transactions. 

Krippenreiter, a cryptocurrency researcher, has commented, offering a detailed perspective aimed at eliminating the mounting worries about the future usability and importance of XRP.

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Stablecoins vs. XRP

The analysis of Krippenreiter starts by specifying the essential variations between stablecoins and XRP. Unlike stablecoins that are pegged to real-world assets such as the US dollar to maintain stability, XRP functions as a globally neutral token on the XRPL.

This non-partisanship gives XRP some level of immunity from counterparty risks found more in the stablecoin sphere as these heavily relies on issuers and institutions. Moreover, XRPL’s transparency provides for live tracking of XRP’s supply dynamics, something that is not inherent to stablecoin operations that depend on periodic audits and attestations.

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Global Financial Dynamics and XRP’s Role

Besides, the analysis also considers the process of dedollarization, which reflects the growing tendency of the BRICS countries among others to reduce their dependency of the US dollar. Such a trend poses a subtle threat to the stablecoin value itself, especially the ones backed by the US dollar, as the trust to the fiat currency weakens.

In contrast, XRP’s value proposition is not tethered to the US dollar, affording it a layer of insulation against such geopolitical and economic shifts. Furthermore, the flexibility of XRP, controlled by consensus among its users, contradicts the top-down governing model of stablecoins, in which the issuers dictated would dictate the supply dynamics.

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Ripple’s Stablecoin Initiative and XRP’s Enduring Value

Even though a Ripple-backed stablecoin has been introduced, Krippenreiter argues that XRP will continue to be relevant in the cryptocurrency ecosystem. The analysis highlights the natural differences in utility and governance observed in stablecoins and XRP, which means that features of the latter, like transaction speed and decoupling from the traditional financial world, will remain its value proposition.

Thus, Ripple stablecoin which is upcoming should be treated as the complementary asset rather than the replacement of another asset within the greater Ripple ecosystem.

Critics, however, have not been absent from the discussion around Ripple’s stablecoin project. One of the most remarkable criticisms was in CoinDesk, which argued that Ripple’s entry into the stablecoin market was driven by a pivot born out of necessity rather than innovation. 

This sentiment was met with robust rebuttals from industry leaders, including Ripple CEO Brad Garlinghouse, who characterized the criticism as baseless. Garlinghouse, supported by insights from Artur Kirjakulov, co-founder and CEO of XPMarkets, highlighted Ripple’s enduring partnerships, its expansion into new business domains, and the continued relevance of XRP in financial transactions as counterpoints to the narrative of decline.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.