As Ripple prepares to launch its RLUSD stablecoin, some members of the XRP community are concerned about its impact on the importance of XRP. Currently in beta testing and launching soon, RLUSD will be available on the XRP Ledger (XRPL) and Ethereum and may support Ripple’s On-Demand Liquidity (ODL) in certain capacities.
Despite this promising application, some supporters wonder whether RLUSD could diminish the importance of XRP, especially for cross-border payments.
Ripple’s CTO remains committed to the role of XRP
David Schwartz, Ripple’s CTO, responded to these concerns and clarified that XRP has special features on the XRPL that RLUSD cannot replace. For example, only XRP can pay transaction fees on the XRPL, and every account on XRPL must hold a portion of the XRP as a reserve. He added that XRP’s biggest advantage over stablecoins is its lack of counterparty risk and freedom from jurisdictional limits, unlike any stablecoin.
Schwartz also highlighted XRP’s “autobridging” feature, which automatically links liquidity between different assets on the XRPL, making XRP an essential tool in the ecosystem.
Schwartz noted that XRP’s role is more than just a transactional token; it is also a bridging asset and helps in transfer between digital assets.
Will RLUSD compete with XRP?
Schwartz acknowledged that if RLUSD or other stablecoins become more efficient, XRP could face competition. However, he believes that XRP’s unique characteristics make it difficult for stablecoins to fully take its place.
Some members of the XRP community suggested increasing the transaction fees or minimum XRP balance on XRPL to increase XRP scarcity and increase its value. Ripple CTO David Schwartz explained that such changes require community consensus and noted that the XRPL must prioritize usability over speculative value.
Ripple’s exploration of new features, such as the EVM sidechain and smart contracts, aims to expand the functionality of XRPL while ensuring that XRP’s critical role remains irreplaceable.
Will the XRP price rise?
Currently, XRP is trading at $0.53, down 0.8%, but there are mixed signals about its future. A bullish pennant pattern on the weekly chart suggests that XRP could break out soon.
However, the 14-day Relative Strength Index (RSI) is at 37.96, indicating that it is almost oversold, which could lead to a small price increase. If the legal challenges are resolved, some experts believe XRP could rise significantly, with price targets between $2.47 and $10 in a strong market.
Credit : coinpedia.org
