Ripple chief technology officer David Schwartz and Venture Coinist founder Luke Martin are debating the utility of the crypto asset XRP.
In a series of tweets, Martin questions XRP’s use as a fuel for payments and says stablecoins pegged to traditional assets have the liquidity required to move money.
“I asked [David Schwartz] what XRP is useful for because it did not make sense to me and his response didn’t make sense to me either.
If it’s for payments, stablecoins are better. Even if you think it’s better for payments, there’s no incentive to hold (not store of value or income-generating).”
In response, Schwartz says he doubts that a single stablecoin will be widely adopted on a global scale.
In order to exchange one stablecoin for another, he believes a digital bridge currency, such as XRP, will be necessary.
“If the whole world settled on one stablecoin, I’d agree with you. But stablecoins are always going to be tied to jurisdictions and counter-parties too. So it is unlikely one winner will emerge.
Today, one of the roles of the dollar is acting as an intermediary or bridge between currencies. For that role, its tie to the US jurisdiction is both an advantage and a disadvantage. Better US than a worse jurisdiction, but a pure digital asset is better still.”
Martin says he believes Bitcoin has already proved it’s an ideal base settlement layer, despite its slow transaction speed compared to XRP.
“We already have a perfect case study for the world you describe! We have thousands of obscure tokenized assets here in crypto. What is the best bridge currency in the crypto universe? Bitcoin (most liquid, survived reg attacks better than any other bridge, decentralized).
I imagine some are thinking – yeah but it’s too slow and throughput is not high enough…. Transactions on exchange (or liquidity pools) don’t have to settle on-chain. All that matters is the liquidity pool/matching engine and using the asset with characteristics you describe.”
Martin highlights that regulatory questions surrounding XRP also place the crypto asset at a disadvantage compared to Bitcoin and stablecoins.
As for Schwartz, he says his vision for XRP has always centered on what’s possible once the asset attains deep liquidity on a global scale.
“My personal vision for XRP, since 2013 or so, was this idea of deep, open, public pools of liquidity that anyone, anywhere could contribute to and draw off of – a global market for assets that someone happens to already have exactly where someone else happens to need them to be.”Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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