World Bank Labels XRP a Cross-Border Stablecoin: Ignites Ripple Community Debate on Future Moves
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The World Bank’s recent classification of XRP as a stablecoin has caused a stir in the crypto community, sparking discussions about its implications for Ripple and its future plans. This classification came to light in a November 2021 research paper titled “Central Bank Digital Currencies for Cross-Border Payments,” where stablecoins were recognized for their role in facilitating efficient and secure cross-border transactions.
Despite reports citing XRP’s volatility as a drawback for payments, the idea of integrating stablecoin functionality into $XRP through Automated Market Makers (AMM) to address the banking sector’s stability demands remains highly speculative. Most community members argue that XRP can never be a stablecoin. The community is divided on the topic. Let’s see what the experts think.
Is the World Bank labeling XRP as a stablecoin a game-changer or just smoke and mirrors?
In particular, the report highlighted XRP, Ripple’s cross-border payment currency, and XLM, the native asset of the Stellar network, as examples of stablecoins due to their stability in value relative to fiat currencies. The World Bank emphasized the efficiency of these assets in enabling faster and cheaper cross-border payments compared to traditional banking methods.
Sean McBride, a former director at Ripple, recently drew attention to this classification, sparking speculation within the crypto community about Ripple’s potential plans regarding stablecoin issuance. McBride believes XRP could become a stablecoin, especially since the World Bank recognized it as one. This acknowledgment shows Ripple’s efforts to make XRP a reliable currency for global payments.
However, this stance by the World Bank has sparked controversy, with analysts speculating that it might be influenced by Ripple’s long-standing plans to launch a stablecoin. Despite this debate, the Wrath of Kahneman supports the idea, seeing it as a way to bring more stability and liquidity to XRP.
What’s Pulling Ripple to Launch a Stablecoin?
Ripple has yet to introduce a stablecoin on the XRP Ledger (XRPL), prompting questions about their strategic decisions. Speculation from influencers like Mr. Huber suggests that Ripple’s focus on positioning XRP as a bridge between different digital currencies, particularly Central Bank Digital Currencies (CBDCs), may have influenced this choice. Moreover, Ripple sees private stablecoins as competitors to XRP’s role as a bridge currency, which explains their reluctance to introduce one.
Amidst these discussions, McBride’s confidence in XRP’s utility and the World Bank’s nod of its stability continue to drive the conversation forward, shaping Ripple’s strategic direction in the current volatile market conditions.
Filed under: Bitcoin - @ February 16, 2024 5:04 pm