No Competition Between CurrenciesDavid Kemp
Some crypto market analysts keep an eye on the latest events occurring in the past few weeks. What draws their attention is usually the movement in the crypto market and the changes that are happening to the top-ranked cryptocurrencies.
Specialists are always curious to find out how they correlate and whether they reflect the real situation participants can witness while dealing with their assets. There are a few major news agencies that claim that XRP is not going to compete with stablecoins. This asset is unlikely to compete with CBDCs, either.
This opinion is gaining popularity among experts and Ripple executives agree with this viewpoint. Whether analysts agree or not, but the fact is that at the moment XRP seems to be ready to contribute to the further development and growth of CBDCs. The same rule applies to stablecoins.
As we all know, XRP is regarded as the world’s third-largest cryptocurrency. More than that, it is greater than many other assets by market capitalization. It is important to mention that this asset is not going to compete with national digital currencies.
Ripple’s director claims that XRP cannot be competing and this applies to both CBDCs as well as stablecoins. This week, official representatives gave an interview during which they announced that the asset is complementary to the global progress – it willingly supports the development of stablecoins and admits that it is essential to keep on developing CBDCs. On the other hand, the executives emphasize that XRP might be considered as a linking asset in international settlement.
Serving as a Bridge
Authorities state that there is a whole variety of crypto assets. However, participants should remember that the role of XRP might be that of a linking asset serving as a bridge in international settlement. No way can we confirm that this asset is competing with CBDCs or stablecoins. As a matter of fact, people who understand the matter on a deeper level find it quite complementary.
Many specialists believe that XRP can help stablecoins, as well as digital currencies, create strong synergy. This will be done by responding to the liquidity issue by linking crypto assets that are completely independent.
Additionally, managers state that the brand’s On-Demand Liquidity plays a great role in many aspects. It was earlier known as xRapid and the product was designed in a way allowing it to process cross-border payments much faster. This method is also cost-efficient since it reduces operational expenses. Professionals confirm that ODL is created to eliminate pre-funding that may sometimes occur in cross-border payments.
Stablecoins share some of the primary objectives. The same can be stated regarding CBDCs. The latter can have initiatives and this would include China’s native currency Yuan. As many analysts say, this asset poses a threat to the dominance of SWIFT – it is now not as speedy as the market would expect. Finally, global banks have also witnessed that CBDC haspotential and it can reduce the costs linked to financial operations.
News agencies remark that Ripple got overtaken and that was what the largest stablecoin (USDT) managed to do three months ago. Stablecoins are pegged, but they are designed to allow less costly payments. They should also speed up settlement times on a global scale.
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