Expert Explains Why Stablecoins Cannot Replace XRP

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Stablecoins have become one of the fastest-growing segments of the digital asset market, driving liquidity across exchanges and powering much of today’s on-chain activity. As adoption expands, a persistent question continues to surface: if stablecoins already move value efficiently, do institutions still need XRP? The answer lies not in price stability, but in how global finance actually works.

That distinction formed the basis of a recent explanation shared by crypto analyst Jake Claver, whose comments on X reignited debate around XRP’s role in institutional settlement. Rather than framing the issue as a technological contest, Claver focused on a structural reality that banks cannot ignore.

Why Neutrality Matters in Bank-to-Bank Settlement

Banks operate in a competitive environment where neutrality is essential. When institutions settle transactions, they avoid using instruments that advantage a rival or concentrate control in the hands of a single issuer. Settlement assets must remain independent, liquid, and free from embedded counterparty risk.

Most stablecoins fail this test. They represent liabilities issued by specific companies, consortia, or platforms. Even when fully backed, stablecoins still tie their users to an issuing entity’s balance sheet, governance decisions, and regulatory exposure. For banks moving large volumes across borders, that dependency creates friction rather than efficiency.

The Structural Limits of Stablecoins

Stablecoins excel at preserving value and facilitating trading within digital markets. They simplify pricing, reduce volatility risk, and support decentralized finance applications. However, those advantages do not automatically extend to interbank settlement at scale.

Cross-border payments require assets that can move freely between jurisdictions without introducing issuer dominance. A settlement layer must remain politically neutral, commercially impartial, and universally liquid. Stablecoins, by design, embed control and oversight at the issuer level, which limits their usefulness as a global bridge between competing financial institutions.

XRP’s Purpose-Built Design

XRP approaches the problem from a different angle. It does not represent a claim on any institution or issuer. Instead, it functions as a neutral bridge asset that enables rapid value transfer between different fiat currencies. Banks can source liquidity on demand without pre-funding accounts or relying on another institution’s tokenized obligation.

This design reduces settlement friction while preserving institutional independence. XRP’s role focuses on movement and conversion, not custody or credit risk. That distinction explains why XRP continues to feature in discussions around enterprise-grade payment infrastructure.

Coexistence Rather Than Replacement

Claver’s argument does not dismiss stablecoins or diminish their importance. Instead, it places them in the correct context. Stablecoins serve transactional and operational roles within digital finance, while XRP addresses the liquidity and neutrality requirements of cross-border settlement.

As blockchain adoption matures, financial institutions increasingly separate tools by function rather than hype. Stablecoins and XRP do not compete for the same role. They solve different problems within the same evolving system.

In global finance, neutrality is not optional. It is foundational.

Disclaimer*: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.*