The post Is Ripple’s RLUSD Stablecoin Could Replace XRP? Ripple CTO Clarified It appeared first on Coinpedia Fintech News
As Ripple prepares to launch its RLUSD stablecoin, some XRP community members are worried about its impact on XRP’s importance. RLUSD, currently in beta testing and set to launch soon, will be available on the XRP Ledger (XRPL) and Ethereum and may support Ripple’s On-Demand Liquidity (ODL) in some capacities.
Despite this promising application, some supporters wonder if RLUSD could reduce XRP’s importance, especially for cross-border payments.
Ripple’s CTO Stands Firm on XRP’s Role
David Schwartz, Ripple’s CTO, responded to these concerns, clarifying that XRP has special functions on the XRPL that RLUSD cannot replace. For instance, only XRP can pay for transaction fees on the XRPL, and each account on XRPL must hold some XRP as a reserve. He added that XRP’s biggest edge over stablecoins is its lack of counterparty risk and freedom from jurisdiction limits, unlike any stablecoin.
Schwartz also highlighted XRP’s “autobridging” feature, which automatically connects liquidity between different assets on the XRPL, making XRP an essential tool in the ecosystem.
Only XRP can be used to pay transaction fees on XRPL. Everyone who transacts must have XRP to pay those fees. XRP is the only asset that every account can hold and that has no counterparty or jurisdiction and cannot be frozen or clawed back. XRP has structural advantages on XRPL…
— David "JoelKatz" Schwartz (@JoelKatz) October 8, 2024
Schwartz noted that XRP’s role is more than just a transaction token; it’s also a bridge asset, helping with transfers between digital assets.
Will RLUSD Compete with XRP?
Schwartz acknowledged that if RLUSD or other stablecoins become more efficient, XRP could face competition. However, he believes that XRP’s unique features make it difficult for stablecoins to fully take its place.
Community Suggestion On XRP
Some XRP community members suggested raising transaction fees or the minimum XRP balance on XRPL to increase XRP scarcity and boost its value. Ripple’s CTO, David Schwartz, explained that such changes would need community consensus & noted that the XRPL should prioritize usability over speculative value.
It's not up to me, it's a consensus decision. But I have personally never felt that we should use fees to try to increase XRP's scarcity. IMO, the ledger belongs to, and should serve, those who use it, not those who hold XRP for passive gain. But smart contracts may result in…
— David "JoelKatz" Schwartz (@JoelKatz) October 8, 2024
Ripple’s exploration of new features, like the EVM sidechain and smart contracts, aims to expand XRPL’s functionality while ensuring XRP’s critical role remains irreplaceable.
Will the XRP Price Surge?
As of now, XRP is trading at $0.53, down 0.8%, but there are mixed signals about its future. A bullish pennant pattern on the weekly chart suggests that XRP might break out soon.
However, the 14-day Relative Strength Index (RSI) is at 37.96, showing it is close to being oversold, which could lead to a small price increase. If legal challenges are resolved, some experts believe XRP could rise significantly, with price targets between $2.47 and $10 in a strong market.
