Ripple’s Impending Stablecoin Raises Questions About XRP’s Future, Is the End Near?

On Apr 25, 2024

A recent inquiry has surfaced regarding Ripple’s Stablecoin and its potential impact on the XRP ecosystem. The discussion was sparked by statements from Ripple executive Eric van Miltenburg, suggesting that the stablecoin could enhance the XRP Ledger (XRPL) rather than diminish it.

However, questions have arisen regarding the role of XRP holdings in Ripple’s stablecoin backing, prompting clarification from Ripple’s CTO, David Schwartz.

Ripple’s Stablecoin & XRP’s Future

Eric van Miltenburg, Ripple’s SVP for Strategic Initiatives, recently commented on the upcoming Ripple stablecoin, hinting at its potential benefits for the XRP ecosystem. With Ripple historically utilizing XRP extensively for cross-border transactions, the emergence of a stablecoin could potentially impact the value of XRP.

On the flip side, Miltenburg addressed concerns about the stablecoin overshadowing XRP, emphasizing that its launch on XRPL would ultimately benefit the ecosystem.

Drawing parallels to stablecoins integrated into other blockchains like Polygon, he suggests that this move could increase the total value locked (TVL) on the XRP Ledger, thereby enhancing trust in the blockchain.

Crypto Eri’s Inquiry

However, members of the XRP community remain skeptical and seek clarification on certain aspects. In response to Miltenburg’s remarks, prominent XRP community figure Crypto Eri sought clarification from Ripple’s CTO, David Schwartz, regarding the role of XRP holdings in the stablecoin’s backing.

A rare question from me @JoelKatz 🙏
Can you help me to understand?
Eric Van Miltenburg, (Ripple SVP) in the Digital Frontiers article interview, explained for some of the payment corridors (s) within its network, Ripple has been using stablecoins.
ok, but…
He also said the… pic.twitter.com/BrgZkyc7Xd
— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) April 25, 2024

Specifically, Eri questioned whether the XRP Ripple holds would be considered part of the “cash equivalent” backing the stablecoin.

Schwartz’s Clarifying Response

In response, Schwartz explained that there is currently no native mechanism to “lock up” assets on XRPL. He suggested that Miltenburg’s reference to stablecoins boosting activity on other blockchains was likely in the context of their impact on overall blockchain utility, rather than specific TVL comparisons.

Currently, there’s not really any native way to “lock up” assets on XRPL. What I think Eric was talking about was how having high-quality stablecoins has driven usage of other blockchains as measured by the increase in value locked.
On XRPL, you’d expect to see people using…
— David “JoelKatz” Schwartz (@JoelKatz) April 25, 2024

Schwartz outlined potential functions for stablecoins on XRPL, including providing a means for individuals to hold funds without exposure to crypto volatility and serving as assets for automated market makers (AMMs). Additionally, he noted that stablecoins could enhance the usability and functionality of XRPL overall.

As the discussion continues, stakeholders in the XRP community await further developments in the evolving landscape of digital assets.