XRP Will Remain Bridge Currency Over RLUSD, Ripple CTO Explains

Ripple CTO David Schwartz has explained why XRP should be the currency of choice to bridge international payments. His statement again put to bed arguments that the RLUSD stablecoin’s emergence could diminish the altcoin’s role in Ripple operations.

XRP’s Neutrality and Liquidity Give It An Edge

Financial YouTuber Andrei Jikh recently wondered why XRP has not had any form of on-chain billion-dollar trading volume despite more than ten years of existence and institutional support. In his response, Ripple CTO David Schwartz gave major points as to why XRP is still the core part of Ripple payment strategy despite increasing stablecoins competition, including RLUSD.

In an X post, Schwartz discussed how in the future, there may not be as much need to bridge the assets with a single dominant stablecoin. However, the existing environment of several fiat-backed stablecoins makes XRP stand out.

With multiple currencies worldwide, XRP can be a neutral bridge in tokenized assets, cross-border settlements, and loan markets. He stressed that the altcoin’s volatility is less crucial as it does not take long to hold it during a transaction.

Hence, the exposure to price fluctuations is minimized. That is why an expert has predicted an incoming RLUSD and XRP dominance over Tether’s USDT following the passage of the GENIUS Act.

When asked why anyone would hold XRP if it’s only a bridge, Schwartz clarified that liquidity providers must hold XRP to enable trades. He added that institutions uncertain about which asset they’ll need next are more likely to hold XRP due to its deep liquidity and utility as an exchange medium.

Interoperability of XRPL Makes It Suitable for Adoption by Institutions

Schwartz also addressed broader adoption issues. He observed that institutions have traditionally favored off-chain transactions because of uncertainty about regulation and trust issues with decentralized systems.

He further stated that even Ripple can use the XRP Ledger DEX for payments due to the lack of measures against its misuse by dangerous entities. The Ripple CTO remarked that permissioned domains would address these issues.

Also, Schwartz explained why firms such as BlackRock may consider using XRP Ledger (XRPL) instead of developing proprietary chains. Referencing the levels of scalability and interoperability that XRPL has to offer, he drew parallels to the way USDC operates on multiple networks.

He believed that global asset tokenization requires a scalable, chain-agnostic platform, which is an attribute that XRPL provides. In reaction to the geopolitical issues, Schwartz made it clear that XRP Ledger does not limit participation on the basis of nationality.

This explanation aligns with experts’ argument that XRP and RLUSD are complementary and that XRP’s rising role in development is notable. According to Schwartz, neutrality, utility, and openness will eventually boost adoption.