Stablecoin

Ethereum

Impact

In response to the Ripple’s proposal of issuing a stablecoin, backed by USD, on the XRP Ledger (<a href="https://coingape.com/xrp-ledger-xrpl-surpasses-87m-ledger-milestone/?utm_source=cgtelegram">XRPL</a>) 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.&nbsp; 
Krippenreiter, a cryptocurrency researcher, has commented, offering a detailed perspective aimed at eliminating the mounting worries about the future usability and importance of XRP. 
<h2 id="stablecoins-vs-xrp">Stablecoins vs. XRP</h2> 
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. 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 [1/<img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9f5.png" alt="🧵" class="wp-smiley" style="height: 1em; max-height: 1em;">] <a href="https://twitter.com/Ripple?ref_src=twsrc%5Etfw">@Ripple</a> announced today that they will introduce a new stablecoin pegged 1:1 to the US dollar. 
 <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f538.png" alt="🔸" class="wp-smiley" style="height: 1em; max-height: 1em;"> Does this imply that XRP is doomed? <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f928.png" alt="🤨" class="wp-smiley" style="height: 1em; max-height: 1em;"> 
 Let's learn together to fully understand the bigger picture. <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f447.png" alt="👇" class="wp-smiley" style="height: 1em; max-height: 1em;"> <a href="https://t.co/NjvkdYCPDK">pic.twitter.com/NjvkdYCPDK</a> 
 — Krippenreiter (@krippenreiter) <a href="https://twitter.com/krippenreiter/status/1776043540390281283?ref_src=twsrc%5Etfw">April 5, 2024</a>
</blockquote> 
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
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. 
<h2 id="global-financial-dynamics-and-xrp-s-role">Global Financial Dynamics and XRP’s Role</h2> 
Besides, the analysis also considers the process of dedollarization, which reflects the growing tendency of the <a href="https://coingape.com/bitcoin-vs-cbdc-vaneck-advisor-advocates-btc-adoption-amid-brics-latest-move/?utm_source=cgtelegram">BRICS</a> 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. 
<h2 id="ripple-s-stablecoin-initiative-and-xrp-s-enduring-value">Ripple’s Stablecoin Initiative and XRP’s Enduring Value</h2> 
Even though a <a href="https://coingape.com/ripple-ceo-brad-garlinghouse-reveals-reasons-behind-stablecoin-launch/?utm_source=cgtelegram">Ripple-backed stablecoin</a> 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. 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 [6/22] — 2⃣ Stablecoin Basics — XRP Ledger 
 On the XRP Ledger, there is a best practice for issuing a stablecoin. 
 It involves configuring and creating purpose-built accounts: 
 1 — Mints the stablecoins 2 — Trusted operator management 3 — Day-to-day business &amp; trading <a href="https://t.co/MaRcCndz52">pic.twitter.com/MaRcCndz52</a> 
 — Krippenreiter (@krippenreiter) <a href="https://twitter.com/krippenreiter/status/1776043558706741516?ref_src=twsrc%5Etfw">April 5, 2024</a>
</blockquote> 
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
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.&nbsp; 
This sentiment was met with robust rebuttals from industry leaders, including Ripple CEO <a href="https://coingape.com/ripple-ceo-clo-backs-ethereum-cftc-say-sec-to-lose-xrp/?utm_source=cgtelegram">Brad Garlinghouse</a>, 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. 
Read Also:&nbsp; <a href="https://coingape.com/breaking-do-kwon-extradition-decision-reversed-by-montenegro-top-court/?utm_source=cgtelegram">Do Kwon Extradition Decision Reversed by Montenegro Top Court</a> 
The post <a href="https://coingape.com/xrp-analyst-dispels-concerns-over-ripple-stablecoin-impact/">XRP Analyst Dispels Concerns Over Ripple Stablecoin Impact</a> appeared first on <a href="https://coingape.com">CoinGape</a>.

XRP Analyst Dispels Concerns Over Ripple Stablecoin Impact

Table of Contents

Coingape News Media

Other articles published on Apr 5, 2024

Veteran Trader Says One Ethereum Rival About to ‘Turbo Send,’ Predicts Strong Crypto Market Rebound

What Is Bitcoin’s Fee-To-Reward Ratio?

Bitcoin Price To Touch $35,000?: A 7-Day Forecast

Increased Venture Capital Interest in Cryptocurrency Projects

Binance Labs Portfolio That Could Soon Get Listed on the Biggest Exchange

Yet Another New Development in the Fate of Terra (LUNA) Founder Do Kwon

Join our free newsletter for daily crypto updates!