Home Bitcoin News Ripple Embraces Stablecoins Alongside XRP for Global Payments to Meet Client Demand

Ripple Embraces Stablecoins Alongside XRP for Global Payments to Meet Client Demand

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In a move that has sparked considerable discussion within the cryptocurrency community, Ripple, a leading fintech company, has recently integrated stablecoins, such as Tether (USDT) and Circle USD (USDC), into its Liquidity Hub product. This development has led some to question whether Ripple is shifting away from its native digital asset, XRP, as the cornerstone of its global payment services. However, prominent XRP community figure Crypto Eri has shed light on why Ripple’s decision to include stablecoins should not be viewed as a departure from XRP, but rather as a strategic response to the evolving demands of its client base.

One of the primary factors cited by Crypto Eri to support her argument is Ripple’s substantial holdings of XRP. Ripple’s position as a significant holder of XRP, with holdings in the billions, makes it unlikely that the company would completely abandon XRP in favor of other cryptocurrencies for its cross-border payment solutions. This substantial XRP ownership is not only a testament to Ripple’s confidence in the digital asset but also a powerful incentive for the company to continue leveraging XRP in its operations.

Crypto Eri also pointed to a past statement made by Ripple’s Chief Technology Officer, David Schwartz. According to Schwartz, Ripple’s holdings of XRP are strategic in nature, serving as a valuable asset in their arsenal. This strategic importance reinforces the idea that Ripple is unlikely to sever ties with XRP, given the integral role it plays within the company’s ecosystem.

The concerns surrounding Ripple’s commitment to XRP were further exacerbated by the recent expansion of its Liquidity Hub service into Australia and Brazil, which notably included stablecoins USDT and USDC while omitting XRP from the expansion bid. This decision raised questions about whether Ripple was shifting its focus away from XRP as a result of the regulatory clarity that emerged following a pivotal court ruling in July.

However, Crypto Eri offered a different perspective on this development. She argued that Ripple’s decision to incorporate stablecoins like USDT and USDC into its Liquidity Hub was not a signal of abandonment but rather a strategic move to cater to the preferences of its client base. In her view, for Ripple to achieve a level of success akin to industry giants like Amazon, it must adapt and provide clients with what they desire, which in this case includes stablecoins.

Stablecoins have garnered significant attention and adoption in the world of payments over the past two years. Crypto Eri cited data from Bloomberg, which revealed that stablecoin payments surpassed those made through Mastercard in terms of transaction volume in 2022. With stablecoins processing over $6.87 trillion and Mastercard at $6.57 trillion, this shift in payment preferences highlights the growing significance of stablecoins in global financial transactions.

Ripple’s decision to embrace stablecoins like USDT and USDC can be seen as a strategic response to the surging popularity of stablecoins. By offering these assets alongside XRP, Ripple aims to tap into the global market appeal of stablecoins while continuing to utilize XRP for its other products, such as On-Demand Liquidity (ODL).

Ripple’s On-Demand Liquidity (ODL) platform, which uses XRP as a bridge currency, has shown significant growth. Recent reports indicate that one of Ripple’s partners processed a remarkable 1,700% increase in transaction volume using ODL. This demonstrates the continued relevance and effectiveness of XRP in facilitating efficient and cost-effective cross-border payments.

In conclusion, while Ripple’s decision to include stablecoins like USDT and USDC in its Liquidity Hub product may have raised questions about its commitment to XRP, it should be viewed as a strategic move aimed at meeting the evolving demands of its client base. With XRP’s strategic importance within the company and the growing prominence of stablecoins in global payments, Ripple is positioning itself to offer a comprehensive range of payment solutions that cater to a diverse set of preferences in the ever-evolving landscape of cross-border payments.

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Maheen Hernandez

A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5

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