A recent video titled “What is wrong with XRP” has sparked heated discussion within the XRP community. The video’s author outlines three key arguments suggesting that XRP is no longer a worthwhile investment. Firstly, the author claims that XRP’s original purpose as a bridge currency for cross-border payments has been rendered obsolete. Stablecoins, which offer greater stability, have taken over this role. The recent launch of Ripple’s own stablecoin, RLUSD, appears to support this view.
Moreover, Ripple’s plan to launch an Initial Public Offering (IPO) is seen as a blow to XRP’s relevance. The author argues that XRP’s value was previously tied to Ripple’s success, but an IPO could shift investor focus away from the token. The author points out that Ripple holds over 38 billion XRP tokens and sells them to fund its operations. This large supply, combined with regular sales, raises concerns about price suppression and oversupply in the market.
Related article: Ripple CTO Explains High Initial Cost of RLUSD Stablecoin
Ripple CTO Responds to Criticism
Ripple’s Chief Technology Officer (CTO), David Schwartz, directly addressed these claims, offering a different perspective. He acknowledged that users do not need to hold XRP to make payments. However, he emphasized that someone must hold XRP to maintain market liquidity, which ultimately supports its utility.
Schwartz also challenged the claim that XRP’s price is driven solely by ecosystem changes or market hype. He used historical price comparisons between XRP and Stellar’s XLM token to illustrate his point. The correlation between the two tokens’ price movements suggests that market trends influence both, rather than company-specific factors alone.
XRP’s Role in Transaction Efficiency
Addressing the criticism about XRP’s use as an intermediate asset, Schwartz argued that holding XRP still offers a practical advantage. It reduces the number of currency exchanges required for cross-border payments. According to Schwartz, if someone is unsure which currency will be needed for a payment, holding XRP can simplify the process.
Related article: Ripple CTO’s ‘Lock In’ Post Fuels Speculation of XRP Price Surge
Furthermore, while the rise of stablecoins presents new competition, Schwartz maintained that XRP’s unique role as a bridge asset still holds value. Unlike stablecoins, which are often pegged to specific fiat currencies, XRP can facilitate payments across a variety of currencies, making it a versatile option in a world of diverse financial needs.
Despite growing criticism, Ripple CTO David Schwartz remains confident in XRP’s continued relevance. He believes XRP’s role as a bridge currency and liquidity asset still offers unique benefits. While stablecoins and Ripple’s IPO present new challenges, Schwartz’s arguments highlight XRP’s enduring utility in the rapidly evolving payments landscape.
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