There will be no global fiat, but XRP will be the bridge currency

• Ripple’s CTO envisions creating an ecosystem of assets where XRP and others will be key.
• XRP Ledger and XRP have been designed to serve as a jurisdiction independent resource.

Central bank digital currencies are occupying much of the attention in the crypto space. Representatives of financial institutions from around the world have expressed interest in digitizing or tokenizing their currencies. Ripple’s CTO, David Schwartz, yes taken a position on the possibility of the emergence of a “global stablecoin” and on the role of the digital asset XRP in this context.

The discussion began when a member of the XRP community referred to the roadmap that was developed by the G-20 Financial Stability Board (FSB) to create a regulation on digital assets. In its publication, the FSB highlighted the benefits of digital assets for making payments faster and cheaper. The user believes that there is room for the emergence of a global stablecoin. Ripple’s CTO responded as follows:

I don’t think there will be a world fiat anytime soon, so even with stablecoins there will be many. To create liquidity between CBDCs, other stablecoins and new tokenized asset classes (securities, DeFi) there is room for a neutral and jurisdictionless asset.

XRP or XLM, what will be the bridge to the world economy?

Continuing the discussion, another community member asked Schwartz whether this “neutral and jurisdictionless” asset is XRP or the XLM native digital asset of the Stellar Lumens blockchain. CTO of Ripple he answered that there won’t be one and noted that Ripple will have to conquer its market share:

I think many digital and fiat assets will compete to play that role and there is room for more than one. I see the dollar’s role as the world’s settlement currency in slow contraction and international trade on the rise. So we’re going to fight for a bigger market share.

In that sense, there will be benefits for digital assets such as XRP or even the dollar, Ripple’s CTO added. In a speech given by Schwartz at Berkeley University on Oct.19, XRP and XRP Ledger were identified as specifically designed to function as a jurisdiction-neutral asset. The XRP Ledger has the necessary characteristics to transact a native asset, a neutral asset, to issue asset bridges and to work with other payment networks. Schwartz explained:

XRPL has resource issuance integrated into the protocol: issuance, authorization, payments, settlement and exchange are all native operations with simple APIs. Assets issued may represent fiat currencies, securities, or anything else of fungible value that functions as a currency.

Ripple’s CTO hopes that XRP Ledger and XRP Digital Asset can be part of an ecosystem for greater liquidity in the global market. In this regard, he added:

The XRP Ledger cannot handle all payments in the world and I am not proposing a “one network” solution. It is totally unrealistic. People want different things and have different problems. But XRP can be the hub or the backbone that provides the fast international settlement piece. It won’t solve the last mile problem, but it will help with interoperability and concentration of liquidity so that businesses don’t have to keep funds in every payment system.