In a rare live exchange on X (formerly Twitter), personal finance influencer Andrei Jikh posed a series of profound questions about the long-term viability of XRP, prompting Ripple's CTO, David Schwartz, to provide deep responses.
Jikh, who noted that he has been following XRP since 2014, expressed skepticism about key issues, from the use and volatility of XRP in practice to its role as a bridge currency and its appeal to institutions. The post quickly gained attention, sparking a broader discussion within the cryptocurrency community.
Key Questions Surrounding the Adoption and Use of XRP
Jikh opened his post with the question of why, despite Ripple having over 300 partnerships with banks and more than a decade of development, XRP has yet to achieve daily trading volumes in the billions.
Schwartz admitted the slow rate of adoption but emphasized that organizations previously preferred to use off-chain digital assets due to concerns about compliance and regulation.
He added, "Even Ripple cannot yet use XRPL DEX for payments because we are not sure whether a terrorist would provide liquidity for payments." He pointed to upcoming features, such as licensed domains, as a potential solution.
Volatility: Responsibility or Strategic Advantage?
Another urgent concern that Jikh raised is the volatility of XRP, questioning why it is used instead of stablecoins for transferring money.
Schwartz responded that volatility is not always a disadvantage. "There are use cases where volatility is not a drawback, but even a benefit," he said, adding that many in the digital asset space view the potential for price increases as worth the risk, especially for those who are not overly risk-averse.
Regarding holding XRP, Schwartz noted that bridge currencies still need holders to maintain liquidity. "If you don’t know which asset you’ll need to hold next, you might hold the dominant bridge currency," he explained, arguing that it could minimize friction in converting between different digital assets.
Are Bridge Currencies Becoming Obsolete?
Jikh also questioned whether bridging currencies like XRP will be necessary in the future as stablecoins become dominant. Schwartz argued that this likelihood is low.
"A stablecoin can only be stable against a specific fiat currency and will always have legal constraints," he said. In a multistablecoin world, XRP or similar assets could still serve as a neutral bridge, especially when trading with less frequently traded tokenized assets such as loan portfolios or securities.
Why Use XRPL Instead of Building a Proprietary Blockchain?
Citing examples like Robinhood using Arbitrum and plans for their own blockchain development, Jikh asked why large companies like BlackRock choose XRPL for tokenization.
Schwartz responded by comparing it to Circle, the company behind USDC. "Why don't they deploy USDC on their own blockchain? You can see that as ridiculous," he said, arguing that the interoperability and mobility of assets are more important than the ownership of the platform in the tokenization space.
Addressing Geopolitical Concerns and Trust
The final point Jikh raised related to geopolitical risks: why should foreign countries trust a private company based in the United States like Ripple?
Schwartz distinguishes Ripple as a company and XRP Ledger (XRPL) as a decentralized protocol. He said, "XRPL has never discriminated against any participant."
Regarding Ripple's enterprise solutions, Schwartz emphasized that the company operates through separate licensed entities around the world. However, he acknowledged that Ripple's headquarters in the United States could create disagreements in certain geopolitical contexts.
Community Response and What’s Next
The profound exchange between Jikh and Schwartz highlights the ongoing tension between the ideals of cryptocurrency and its implementation in the real world. While XRP proponents praise its potential as a global liquidity solution, critics remain cautious about its adoption speed, legal barriers, and competitive positioning.
However, Schwartz's candid feedback suggests that Ripple remains committed to developing its technology and making a case for organizations and the cryptocurrency community at large.