The World Bank’s classification of XRP as a stablecoin in the context of its utility in the payment landscape has recently resurfaced in the crypto community.
World Bank Calls XRP Stablecoin
Notably, the classification came in a November 2021 research paper titled “Central Bank Digital Currencies for Cross-Border Payments.”
The report considered the endeavors undertaken at the time to streamline cross-border payments for efficiency and cost-effectiveness.
It recognized stablecoins as a digital currency category that provides instantaneous processing and secure payments. In particular, the report laid emphasis on their stability concerning parity with fiat currencies.
Based on this premise, the World Bank identified two virtual assets that they believe fall into the stablecoin category: Ripple’s cross-border payment currency, XRP, and the native asset of the Stellar network, XLM.
The World Bank report also emphasized that XRP and XLM enable faster and more efficient cross-border payments than traditional correspondent banking methods.
Sean McBride, a former director of Global Talent Acquisition at Ripple, recently brought the crypto community’s attention to this World Bank’s classification of XRP.
Ripple Needs No Other Stablecoin
The context of the conversation revolved around speculation regarding when Ripple might contemplate issuing its own stablecoin.
Pseudonymous but renowned XRP community figure WrathofKahneman pondered whether Ripple’s recent custody acquisitions hinted at underlying plans for such a move.
WoK envisioned a scenario where Ripple could utilize the stablecoin in automated market makers’ (AMMs) liquidity pools and list it on exchanges with significantly higher attestation and compliance levels than USDT and USDC.
The Ripple director chimed in, acknowledging WoK’s proposal. However, he questioned the rationale behind moving away from XRP and its utility, especially considering the progress. He pointed out that many, including the World Bank, already classify XRP as a stablecoin.
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
In response, WoK clarified that his suggestion was not about moving away from XRP but creating a liquidity generator through the AMM. He highlighted that numerous reports cite XRP’s volatility as a drawback for payments, a perspective he does not entirely share.
Notably, The Crypto Basic recently called attention to a proposed scenario where XRP integrates stablecoin functionality via AMMs to address the stability demands of the banking sector. However, this scenario remains highly speculative, with most community members contending strongly that XRP can never be a stablecoin.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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