DeutschDo banks even use XRP? Although the cryptocurrency is intended for this role, whether this actually happens in practice raises questions time and again. Now even founder David Schwartz confirms: Institutions have hardly used XRP so far. Regulatory obstacles are to blame for this.
CFDs and real stocks in a trading platform with free deposits and no conditions - that's XTB.
Banks Don’t Use XRP at all? This Obstacle is Keeping the Coin Small
Banks don’t use XRP at all, even though the cryptocurrency was conceived as a coin for financial institutions? Investors are repeatedly asking themselves about the actual use of XRP. This debate recently flared up again on the short message platform X. This time, even XRP founder David Schwartz took a position.
The YouTuber Andrei Jikh expressed doubts about XRP’s actual popularity on X. According to the developer Ripple, 300 banks are already committed to XRP. Jikh criticized that one could not notice anything from daily bank transfers in the billions.
Schwartz agrees with Jikh’s criticism. According to the XRP founder, it is regulatory problems that prevent institutional interested parties from finally taking the step onto the blockchain. Cryptocurrencies such as XRP are used by banks, but primarily away from the blockchain and then settled between business partners in a payment channel – similar to Bitcoin Lightning.
“Institutions have historically preferred to use digital assets outside the blockchain rather than within. I think we are on the verge of changing this as institutions gradually recognize the benefits of moving to the blockchain”, says Schwartz.
Public blockchains are considered much more secure because they have a large number of independent participants. However, the regulatory influence, which has so far had a negative impact, is so great that even Ripple is partially excluded from using its own blockchain. In the USA, however, the political situation currently seems to be changing decisively.
“Even Ripple cannot yet use the XRPL DEX for payments because we cannot be sure that a terrorist is not providing the liquidity for the payment”, Schwartz announces.
In the future, however, this problem will be solved by controlling the blockchain more strictly. Then only authorized users may take on certain tasks in order to meet regulatory requirements.
“Features like authorized domains will fix this problem.”
You are currently seeing a placeholder content of X. To access the actual content, click on the button below. Please note that data will be passed on to third-party providers.
Is XRP Made Pointless by RLUSD? Founder Denies
Since Ripple’s own stablecoin RLUSD came onto the market in December 2024, many users have expressed criticism. What does XRP do if RLUSD could serve as an alternative that should also maintain parity with the US dollar?
As the native token of the XRPL, XRP naturally continues to have a unique purpose. Transactions via the network are paid with XRP. But that’s not all.
David Schwartz denies the criticism that XRP is losing users to RLUSD. This complaint is incorrect. Because: Institutions, just like private individuals, are interested in crypto investments. A stablecoin logically cannot fulfill this role.
Instead, XRP is an option. Anyone who wants to invest in the crypto market could therefore choose XRP, as Schwartz explains. Banks that have no interest in a crypto investment can acquire XRP in the short term and use it as an intermediary for cross-border money transfers – then other investors can benefit from holding the token.
“A bridge currency only works if someone holds it so that it can be used exactly when you need it. If you don’t know which coin you need next, you could simply hold the dominant bridge currency because it is cheaper to exchange it for what you need next”, Schwartz argues for XRP.
The programmer also cites the fact that a stablecoin will always be subject to the influence of a government due to its fiat link as a counter-argument to stablecoins.
