The advent of Stablecoins and Central Bank Digital Currencies (CBDCs) has pretty much put Ripple’s XRP in a compromising position, especially given that they do almost exactly what XRP does when utilized in cross-border payments.
For some time, a lot of people have had the impression that XRP is in serious competition with Stablecoins and CBDCs in a race to topple traditional systems and claim a big market share.
However, a recent statement by one of Ripple’s top executives indicates otherwise. During an interview with FXcoin, a Japanese exchange, Ripple’s head of global operations, Emi Yoshikawa said that XRP complements CBDCs and Stablecoins instead of competing with them.
XRP As A “Bridging Asset”
Going on, Emi posited that instead of putting up a fight against the two mentioned assets, XRP can serve as a bridging asset to add to their collective effort to improve liquidity in international payment settlements.
Ripple has been at the forefront in fielding innovative payment solutions to increase liquidity while pushing down transaction costs, and these efforts have been recognized by many as revolutionary. Some of the solutions, like the RippleNet and ODL (On-Demand Liquidity), have already been adopted by various banks and other financial institutions.
Traditional Systems Under Threat
Traditional cross-border funds transfer systems like SWIFT have come under direct threat from XRP, and now Stablecoins and CBDCs are adding to the increasing pressure to totally abandon SWIFT. In fact, a fair number of banks and institutions have already jumped ship.
For one, the 3 assets prove to offer efficiently fast and secure payments at incredibly low fees, something that the traditional banking system can’t match. Various Central Banks have already expressed interest in developing their own CBDCs.
Emi’s statement comes weeks after Tether (USDT) surpassed XRP in terms of total market cap. However, at the time of this writing, XRP has long reclaimed its spot as the 3rd largest crypto by market cap. Tether sits at position 4 – according to data on CoinMarketCap.