Ripple’s native cryptocurrency, XRP, has been a standout performer in the cryptocurrency market, rising nearly 500% from $0.50 to $2.60 in recent months. Despite this remarkable growth, XRP has been criticized in a video titled “Everything Wrong with XRP,” sparking debate within the cryptocurrency community.

Major Criticisms of XRP

The author of this video outlines three main reasons why XRP may not be a solid investment.

Replacing with Stablecoin: The author argues that XRP's initial role as a bridge currency for cross-border payments has been overshadowed by stablecoins, a type of currency that offers greater stability. Ripple's recent launch of a stablecoin, RLUSD, has added momentum to this claim.

Ripple's IPO plans: The video suggests that Ripple's IPO plans undermine XRP's relevance, as the company's stock performance could overshadow this cryptocurrency.

Ripple's large XRP holdings: Ripple currently holds over 38 billion XRP tokens and has sold them to fund operations. According to the author, this centralization poses risks to XRP's long-term value.

Ripple's CTO David Schwartz responds

In response, Ripple's Chief Technology Officer, David Schwartz, directly addressed these criticisms from X.

Schwartz dismisses the claim that stablecoins make XRP obsolete. He explains that XRP's unique role as a bridge currency depends on its liquidity and the holder's ability to freely buy and sell the token. This liquidity ensures that XRP remains a valuable asset for payments.

Moreover, Schwartz notes that holding XRP can simplify transactions by reducing the number of currency transactions required. "If you don't know which currency you will need next, holding XRP makes sense," he said.

Schwartz also expressed skepticism about predictions related to XRP's price volatility, emphasizing that XRP and Stellar (XLM) often follow similar market trends, driven by broader factors rather than specific developments of Ripple.

Why XRP Still Has Potential

Despite the criticisms, Schwartz still supports the importance of XRP in the digital payment ecosystem. For individuals and businesses using multiple currencies, holding XRP can streamline operations, making it an efficient choice in a complex financial landscape.

While debates continue, Ripple is moving towards the approval of an XRP ETF. The company has been working closely with financial institutions and so far, four applications for the XRP ETF have been submitted. These efforts suggest a strong possibility that the proposals could be approved before 2025.

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