XRP Ledger: Ripple CTO Breaks Silence on Usage and Banking Partnerships

Key Insights:

• Ripple CTO says compliance concerns have slowed XRP Ledger’s on-chain adoption despite bank partnerships.
• XRP’s volatility may not deter users who see holding it as a practical or strategic choice in uncertain markets.
• Bridge currencies like XRP could remain useful in a multi-stablecoin world with diverse tokens and legal limits.

David Schwartz, the CTO of blockchain payments firm Ripple Labs Inc. has responded to concerns raised online about XRP Ledger’s real-world usage and the company’s bank partnerships.

He provided insight into why the expected on-chain activity has not met expectations over the years.

Ripple CTO on Low XRPL On-Chain Activity Despite Bank Deals

David Schwartz has addressed growing questions about the actual use of the XRP Ledger (XRPL).

His response came after a social media post by investor and content creator Andrei Jikh, who has followed XRP since 2014.

Jikh asked why XRP, despite being around for more than a decade and with over 300 bank partnerships, does not have billions in daily on-chain volume.

In reply, Schwartz said there are reasons why banks and financial firms have not widely used XRP on-chain.

According to him, many institutions still prefer to move funds off-chain due to compliance and security concerns.

He said this could change soon as more institutions begin to see the benefits of moving transactions onto blockchain networks.

Schwartz added that Ripple itself has not fully used the XRP Ledger’s decentralized exchange for payments.

He explained that the company needs more control over who provides liquidity to avoid issues such as unknowingly working with sanctioned groups.

Also, he said features like permissioned domains are being developed to help solve this.

Why XRP Ledger Is Still in Use Despite Price Swings

Another concern raised was about XRP’s price volatility and why anyone would use it for transfers instead of stablecoins.

Schwartz said in some situations, volatility might not be a problem. For example, if a person or business believes XRP’s value will grow, holding it could make sense.

Notably, he explained that not everyone is risk-averse, and some users see the potential reward as greater than the risk.

He also touched on why people still hold XRP, even when it is used as a bridge between other currencies.

He said that for XRP to work as a bridge, someone has to hold it and be ready to trade at the right time.

For many users, holding XRP might be the most practical choice when they are unsure what currency they will need to use next.

Future Role of XRP in a World Full of Stablecoins

Meanwhile, Jikh also asked whether bridge currencies like XRP will still be needed if stablecoins cover most currency pairs.

The Ripple CTO responded that a single stablecoin is unlikely to dominate globally. Each one is tied to a national currency and comes with legal limits.

In a world where many stablecoins exist, he noted that XRP could still help connect smaller or less common digital assets.

When asked why a large company like BlackRock might use the XRP Ledger instead of building its own blockchain, Schwartz pointed out that using existing networks can be more practical.

He gave the example of Circle, the firm behind USDC, which runs its stablecoin on multiple blockchains rather than building a private one.

Global Trust and the U.S. Connection

Lastly, Schwartz responded to a question about whether countries would trust a payment system linked to a U.S. company.

He said the XRP Ledger itself is not controlled by Ripple and does not block anyone from using it.

He also said Ripple has separate legal entities in different regions, which helps reduce concern over U.S. influence.

However, he admitted that some countries may still have reservations, especially in politically sensitive areas.

David Schwartz said Ripple would continue building trust and working where it is welcomed.