A fascinating debate about XRP and stablecoins like USDT has emerged between former Ripple CTO David Schwartz and members of the XRP community. During the exchange, questions were raised about whether banks would choose XRP despite Ripple’s concentrated token ownership—and whether the cryptocurrency still remains relevant in an era dominated by stablecoins. Schwartz responded with detailed explanations, highlighting XRP’s advantages for banks and the factors that make it a more attractive alternative to stablecoins.
Ex-Ripple CTO Reveals Why Banks Will Choose XRP
Crypto enthusiast Mason Versluis has raised a sharp and legitimate concern about the incentive structures behind XRP’s adoption by banks. In a post on X, Versluis asked holders why they believe global banks will use XRP, and drive a price rally that could make Ripple one of the wealthiest financial institutions in the world.
Versluis noted that Ripple currently owns over 40% of XRP’s total supply, which is roughly 34 billion escrowed tokens. If banks widely adopt XRP, the value of this already substantial holding could rise sharply, making Ripple wealthier.
His argument points to a potential conflict of interest, questioning whether banks, which are essentially being asked to enrich a competitor, would willingly go along. In other words, he’s basically asking why banks such as JPMorgan or HSBC would want to be the engine that makes Ripple richer than all of them.
Schwartz responded with a dismissive one-liner, essentially mocking the logic behind the concern. The former Ripple CTO argued that it would be irrational for banks to reject a genuinely useful and innovative technology simply because it also benefits the company monetarily. His sarcastic comment suggested that banks would rather evaluate XRP’s technology on its merits rather than worry about inadvertently enriching Ripple.
Why XRP Has An Edge Over Stablecoins Like USDT
During the discussion between Schwartz and Versluis, a different crypto community member raised a more strategic question. He asked if XRP’s “technology is still relevant in the age of stablecoins.”
Related Reading: Are Institutions About To Trigger A Massive XRP Supply Shock? Here’s How Much They’re Holding
Notably, stablecoins like USDT and USDC have exploded in adoption precisely because they address the volatility and stability issues that make most cryptocurrencies impractical for payments. Schwartz, however, pushed back thoughtfully against this view, providing a more detailed answer than his earlier response to Versluis.
The former Ripple CTO outlined “three big advantages” cryptocurrencies like XRP have over stablecoins. His first point addressed cross-border transfers, noting that stablecoins are usually pegged to a single currency. As such, users could face difficulties sending money to multiple countries with different currencies because they may not find a stablecoin widely accepted and easily convertible in many jurisdictions.
His second point focused on centralization, control, and security. Schwartz stated that stablecoins can be frozen or seized by their issuers, who are subject to legal and government pressure. He described a scenario where AI agents or individuals in unclear legal situations may not be able to rely on a court to protect their assets from being frozen. In contrast, decentralized cryptocurrencies like XRP, designed to be censorship-resistant, mitigate this risk, giving users greater freedom and protection.
Lastly, Schwartz highlighted the potential gains from holding cryptocurrencies compared to stablecoins. While USDT remains idle, generating no returns and could even lose buying power due to inflation, XRP offers an attractive combination of speed, cross-border payments, and the potential for price appreciation.
Featured image from Adobe Stock, chart from Tradingview.com
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