Will the New Stablecoin from Ripple Replace XRP?

David Schwartz, CTO of Ripple, has commented on concerns regarding the potential impact of the upcoming Ripple stablecoin on the use of XRP as a bridge currency for ODL transactions.

Ripple, the San Francisco-based blockchain payment company, recently announced plans to introduce a new stablecoin on the Ledger (XRPL) and Ethereum networks. Despite the optimistic reaction to this announcement, some suggest that Ripple may be shifting its stance towards XRP.

Concerns and Speculations These mixed feelings have led to discussions about the potential impact of the stablecoin on the utility of XRP. The discussion began when a member of the XRP community asked about the role of the new stablecoin in the ODL payment model (now Ripple Payments).

They wondered if the introduction of the stablecoin would cause XRP to no longer be used to facilitate cross-border transactions. Essentially, this XRP investor was curious if Ripple was signaling a departure from XRP as the preferred bridge currency for international payments.

Schwartz did not provide a clear-cut answer to whether the new stablecoin would replace XRP in ODL transactions, emphasizing only the importance of encouraging the adoption of payment solutions that can effectively settle with XRP:

"In cases where the intermediary currency is not held for long periods, a stablecoin actually has no advantages. This will likely stem from issues such as liquidity and availability," said Schwartz.

Schwartz, however, underscores that the choice between a stablecoin and XRP depends on various factors such as liquidity and the availability of currency exchange platforms. In the meantime, Ripple continues to promote XRP as the preferred bridge currency.

In the context of previous statements from Ripple employees, it seems unlikely that Ripple will completely abandon XRP in favor of the stablecoin. Previous interviews with Brad Garlinghouse suggest that the introduction of the stablecoin aims to expand the product offerings in the market, implying that XRP will continue to play a significant role in the Ripple ecosystem.