World Bank Designates XRP as a Stablecoin for Cross-Border Transactions, Sparking Debate within the Ripple Community about Future Strategies
The recent classification of XRP by the World Bank as a stablecoin has caused quite a commotion in the crypto community, sparking discussions about the implications for Ripple and its future plans. This classification was revealed in a research paper titled “Central Bank Digital Currencies for Cross-Border Payments” published in November 2021, which recognized stablecoins for their role in facilitating efficient and secure cross-border transactions.
Despite reports highlighting XRP’s volatility as a disadvantage for payments, the notion of integrating stablecoin functionality into XRP through Automated Market Makers (AMM) to address the stability demands of the banking sector remains largely speculative. Many community members argue that XRP can never truly be a stablecoin, leading to a divided opinion within the community. Let’s take a look at what the experts have to say.
The World Bank’s labeling of XRP as a stablecoin has raised the question of whether this is a game-changing development or just a smokescreen. The report specifically mentioned XRP, Ripple’s cross-border payment currency, and XLM, the native asset of the Stellar network, as examples of stablecoins due to their stability in value compared to fiat currencies. The World Bank emphasized the efficiency of these assets in enabling faster and cheaper cross-border payments compared to traditional banking methods.
Sean McBride, a former director at Ripple, recently brought attention to this classification, sparking speculation within the crypto community about Ripple’s potential plans regarding stablecoin issuance. McBride believes that XRP could become a stablecoin, especially since it has been recognized as one by the World Bank. This recognition demonstrates Ripple’s efforts to establish XRP as a reliable currency for global payments.
However, the World Bank’s stance has sparked controversy, with analysts speculating that it may be influenced by Ripple’s long-standing plans to launch a stablecoin. Despite the debate surrounding this issue, the Wrath of Kahneman supports the idea, viewing it as a means to bring more stability and liquidity to XRP.
The question arises as to why Ripple has not yet introduced a stablecoin on the XRP Ledger (XRPL), leading to inquiries about their strategic decisions. Influencers like Mr. Huber speculate that Ripple’s focus on positioning XRP as a bridge between different digital currencies, particularly Central Bank Digital Currencies (CBDCs), may have influenced this decision. Furthermore, Ripple sees private stablecoins as competitors to XRP’s role as a bridge currency, which explains their reluctance to introduce one.
Amidst these discussions, McBride’s confidence in XRP’s utility and the World Bank’s acknowledgment of its stability continue to drive the conversation forward, shaping Ripple’s strategic direction in the current volatile market conditions.