- The World Bank classified XRP as a stablecoin as it streamlines cross-border payments for efficiency and cost-effectiveness.
- This categorization is unique in that the altcoin is compared to leading stablecoins such as USDC and USDT.
An intriguing report from the World Bank that categorizes XRP as a stablecoin has resurfaced. This classification took place in 2021 in a research paper titled “Central Bank Digital Currencies for Cross-Border Payments” by the World Bank.
This paper has recently resurfaced, with the XRP community celebrating the acknowledgment by the bank of XRP as a stable option for cross-border transactions. In particular, the new status is based on its efficiency and cost-effectiveness.
The report acknowledged stablecoins as digital currencies that provide fast and secure payments. Facilitating fast, efficient, and cost-effective transfers, the report went further to identify two virtual assets that fall under this category; Ripple’s cross-border payment currency, XRP, and the native asset of the Stellar network, XLM.
Both digital assets leverage blockchain technology to facilitate fast and low-cost cross-border payments. While XRP has taken a more institutional view, helping drive businesses, XLM is focused on retail, helping bank the unbanked. Both have achieved greater success than traditional banking methods, which are expensive, time-consuming, and slow to settle.
Does Ripple (XRP) Need a stablecoin?
Renowned XRP community figure WrathofKahneman has recently questioned when Ripple will issue its stablecoin. WrathofKahneman speculated that Ripple’s recent acquisitions in the custody space might signal their intention to issue their stablecoin. They envisioned Ripple leveraging this stablecoin in liquidity pools of automated market makers (AMMs) and listing it on exchanges with stricter compliance and attestation standards compared to existing options like USDT and USDC.
To this, Sean McBride, a former director of global talent acquisition at Ripple, argued that this would be moving away from XRP and its utility.
Ripple has tons of capital. I’m super interested in your thought here, though. Why move away from #XRP and its utility with progress being made, and many including the World Bank, already classifying #XRP as a stable coin? Thank you for all your research and insight, it’s truly…
— Sean McBride (@seanmcbride16) February 14, 2024
However, XRP’s adoption as a cross-payment option could still be hindered by the token’s volatility. Unlike stablecoins, which are pegged to the dollar, the XRP price could easily fluctuate. This could prove challenging for businesses and value estimates.
There is still concern about the ongoing Ripple v. SEC case. The U.S. SEC claims that XRP is a security that casts a shadow over the future of cryptocurrency. Ripple CEO Brad Garlinghouse recently noted that on every item that the SEC cared about in the legal fight against Ripple, the agency lost the battle, from XRP’s security status to individual battles against him and Larsen.
At the time of writing, XRP is trading for $0.545 after a nearly 2% surge in the last 24 hours.
Ranked 6th in the crypto market, the altcoin is expected to go on a parabolic rally this year off the back of the conclusion of the SEC case, the potential of an XRP ETF launch, and the greater bullish outlook.
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