This week, Ripple CTO David Schwartz addressed questions regarding the real use of XRP and the issues surrounding institutional activity on the platform.
Reasons for Low Activity on XRPL
Schwartz pointed out that the low on-chain transaction volume is linked to regulatory constraints, particularly the risks associated with working with unknown or unsanctioned counterparties through decentralized exchanges. He added that even Ripple cannot use the XRPL DEX for payments. However, upcoming features like permissioned domains are aimed at resolving this by allowing compliant institutions to transact with vetted participants on-chain.
Comparison of XRP and Stablecoins
Schwartz also addressed the recurring question of why to use XRP over stablecoins. He argued that XRP’s volatility is not always a drawback, especially for bridge currency use cases where liquidity and flexibility are key. Unlike fiat-pegged stablecoins, XRP can act as a neutral connector between multiple assets.
Openness of XRP Ledger and Its Importance for Ripple
Regarding major players like BlackRock choosing XRPL over proprietary chains, Schwartz emphasized the advantages of building on open, liquid networks. He also clarified that while Ripple’s enterprise operations are constrained by regional licensing, the XRP Ledger itself remains neutral and open globally. Schwartz reiterated that XRP remains deeply integrated into Ripple’s payment infrastructure, even if much of that utility isn’t visible on-chain.
In conclusion, Schwartz underscores the importance of regulation and accessibility in institutional transactions based on XRP and XRPL, as well as their role in the modern financial ecosystem.
