Ripple CTO David Schwartz recently addressed the Ripple community on Twitter and clarified ten distinct points that he believes need to be directly addressed to ensure the success of Ripple and the XRP cryptocurrency. Schwartz initiated the conversation to debunk some of the common misconceptions regarding the company and its digital currency.
1. Ripple Management of XRP Supply:
Regarding the XRP supply controlled by Ripple, Schwartz clarified that Ripple cannot unilaterally seize an individual’s XRP, nor can they force anyone to use XRP. Additionally, Ripple cannot create XRP as it has no influence over the XRP ledger. Forty-five billion XRPs are currently set aside for distribution by the company through various avenues, such as sales, payments, and other incentives.
2. Legality of XRP:
Schwartz provided assurance that the legality of XRP and its uses for international transactions has been thoroughly reviewed by legal experts. He mentioned that financial institutions utilizing XRP for cross-border transactions are required to follow the necessary legislation and guidelines for each country they operate in. Ripple has consistently shared its goal of being a compliant cryptocurrency from the start, actively seeking regulatory clarity and collaboration with financial institutions and governments.
3. XRP Market Decentralization:
Schwartz debunked the myth that Ripple is centralized, stating that XRP usage by non-Ripple affiliated entities has diversified significantly in the past few years. The overall market for XRP now includes a wide range of businesses and use cases beyond the cross-border payments which Ripple focuses on, such as Coil for micropayments, Forte for gaming, and Sologenic for tokenizing stocks and ETFs. Moreover, Ripple has no control over XRP’s trading price.
4. Ripple’s Partnership Approach:
Ripple’s success hinges on developing strategic partnerships with various businesses and financial institutions, helping them implement Ripple’s technology effectively. Schwartz shared that Ripple is actively working with more than 300 financial institutions and businesses worldwide, including well-known brands like American Express, Standard Chartered, and Santander Bank. He added that as the number of partnerships increases, it will inherently drive the adoption, usage, and demand for XRP.
5. Impact of Ripple’s XRP Holdings:
Ripple holds about half of the total XRP supply, raising concerns over its impact on the overall cryptocurrency market. Schwartz assured that Ripple enforces strict policies to prevent price manipulation and treats its XRP holdings as a strategic asset for the long-term health of the company. Additionally, the majority of its XRP holdings are locked in time-restricted escrow, providing the community and the market with transparency and predictability.
6. Ripple’s Global Regulatory Strategy:
As an emerging technology, Ripple is accountable to multiple regulatory authorities worldwide. Schwartz emphasized Ripple’s proactive approach to working with regulators, including engaging with central banks, government bodies, and institutions across the globe. Ripple’s goal is to provide innovative financial solutions that benefit everyone while maintaining the highest standards of safety, security, and compliance.
7. Transparency and Efficiency:
Schwartz highlighted that Ripple’s On-Demand Liquidity (ODL) and XRP are designed to deliver seamless, transparent, and cost-effective transactions. The technology reduces the time and costs associated with cross-border transactions by leveraging XRP as a bridge currency, allowing financial institutions to bypass the need for pre-funded nostro accounts. Ripple’s ODL also offers the advantage of increased transparency, enabling parties to track the status of transactions in real-time.
8. Ripple and Interledger:
Interledger Protocol (ILP) is an open standard for transferring value across different ledgers and blockchain platforms. Schwartz mentioned that Ripple is a key contributor to the ILP, which promotes interoperability between different digital assets and networks. With more platforms and cryptocurrencies connected to the ILP, this compatibility can help amplifying the value and use-cases of XRP and other digital assets.
9. Ripple and Security Compliance:
Schwartz ensured that Ripple goes beyond simple adherence to regulatory requirements, actively promoting and advancing security standards within the industry. Ripple’s XRP Ledger has been developed with a focus on security and resilience, maintaining a pristine track record since inception. The company also pioneers emerging standards for compliance, such as ISO 20022, to ensure that their platform remains both secure and future-proof.
10. The Vision for Ripple and XRP:
Schwartz shared that Ripple’s ultimate vision is to deliver an Internet of Value (IoV), enabling the seamless global exchange of value, just as the internet did with information. XRP, as a digital asset and bridge currency, plays a crucial role in realizing this vision. This involves developing a network of institutions, businesses, regulators, and developers that will utilize Ripple’s technologies and XRP to create innovative financial solutions and products.
These ten points outlined by Ripple’s CTO provide much-needed clarity and direction for the growing XRP community. It is essential that this community continues to work together, sharing knowledge and collaborating to advance the Ripple and XRP ecosystem.