- XRP’s classification as a stablecoin by the World Bank highlights its effectiveness in cross-border payments and currency stability.
- Speculation about Ripple launching its stablecoin underscores the debate, but reaffirms XRP’s usefulness and uniqueness in the market.
The recent World Bank classification of XRP as a stablecoin, in the context of its utility in the payments landscape, has generated renewed interest in the crypto community.
This recognition came in a November 2021 research paper entitled “Central Bank Digital Currencies for Cross-Border Payments,” which highlighted XRP’s role in streamlining and reducing costs in international payments, identifying it, along with Stellar’s XLM, as digital assets with stablecoin characteristics for their instant processing capabilities and secure payments, emphasizing their stability in parity with fiat currencies.
XRP and its Role in Cross-Border Payments
This World Bank approach highlights the efficiency and speed of XRP for cross-border payments compared to traditional banking methods.
Sean McBride, former Director of Global Talent Acquisition at Ripple, recently emphasized this World Bank ranking, bringing to light the debate over Ripple’s need to issue its own stablecoin.
Speculation about a Ripple Stablecoin
The discussion centered on speculation about whether Ripple would consider issuing its own stablecoin, especially given its recent acquisition of custodial services. A prominent member of the XRP community, known as WrathofKahneman, suggested that Ripple could use the stablecoin in automated market maker (AMM) liquidity pools and list it on exchanges with attestation and compliance levels higher than USDT and USDC.
Ripple’s Response
In the face of this speculation, a Ripple director questioned the logic of moving away from XRP and its utility, noting that many, including the World Bank, already classify XRP as a stablecoin.
WrathofKahneman clarified that his suggestion was not to move away from XRP but to create a liquidity generator through the AMM, noting that while some reports cite XRP’s volatility as a disadvantage for payments, he does not fully share this perspective.
Ripple has tons of capital. I’m super interested in your thought here, though. Why move away from #XRP and its utility with progress being made, and many including the World Bank, already classifying #XRP as a stable coin? Thank you for all your research and insight, it’s truly…
— Sean McBride (@seanmcbride16) February 14, 2024
Implications for XRP
XRP’s classification by the World Bank as a stablecoin, while controversial, highlights its pivotal role in the digital payments ecosystem and reinforces its position as a valuable tool for fast and efficient international transactions.
Despite speculation about a possible Ripple stablecoin, this debate underscores XRP’s strength and uniqueness in the market, suggesting that its value lies not only in its perceived stability but also in its innovative ability to transform the global payments industry.
The discussion of integrating stablecoin functionalities through AMMs to meet the stability demands of the banking sector remains speculative, but illustrates XRP’s dynamism and adaptability in the face of financial market challenges.
