Ripple CTO, David Schwartz, has explicitly said that crypto like XRP could challenge the US dollar (USD) and become the world’s reserve currency.
His thesis is that nations outside the US will grow tired of relying on a foreign currency and opt for alternatives such as digital assets.
RIpple is expanding more and more into the world of banking, but perhaps Schwartz’s goal is a little too far beyond the real possibilities for the crypto project.
Let’s look at all the details together
Summary
XRP vs USD: Ripple CTO says crypto can challenge the US dollar
In a recent Twitter room hosted by a member of Ripple’s crypto community, namely XRPStewie, there was a lot of talk about the future of Ripple and its difficult relationship with the US dollar (USD).
The informal chat was attended by David Schwartz, Ripple’s CTO and an expert on blockchain-related software products, who made an unusual bet.
According to him, in the next few years, cryptos like XRP will succeed in challenging the dollar (USD) by becoming the dominant reserve currency on which the next global economy will be based.
Schwartz’s thesis is very clear: at the moment the USD dominates the world monetary scenario as the main reserve currency, but it is possible that all states outside the US will begin to explore alternative solutions that are not under the control of their political rivals.
By adopting a cryptocurrency that is not controlled by anyone as the standard, many nations could stop depending on a single entity and reshape the global currency landscape.
This is the best case scenario for XRP, which would see its role as an intermediary between banks grow to replace the USD and other currencies such as the euro, yen and ruble.
The RIpple community was thrilled with the words of the CTO, who explained his idea verbatim in the Twitter conversation as follows:
“Nobody but the EU wants the EU to replace the dollar. Nobody but Russia wants the ruble to replace the dollar; nobody but China wants the yuan to replace the dollar. So maybe they would rather have a currency that nobody can control than a currency that is controlled by their most powerful political rival. So I think that is the biggest possible success scenario for digital assets.”
Of course, there has been no shortage of criticism of Schwartz’s ambitious gamble, given the volatile nature of cryptocurrencies and the apparent difficulty of getting them accepted by governments around the world.
Ripple expands into the world of banking
Ripple continues its expansion into the private banking sector, using its XRP private ledger blockchain as a dedicated infrastructure for transactions between institutions. USD is also finding its way into Ripple’s network with so-called CBCDs, which the crypto project team is working on to provide a basis for exchanges between central governments and institutions.
Ripple’s CTO himself pointed out that smaller banks, which prefer software solutions not developed by larger banks, could adopt a completely different model to the current one.
Cryptocurrencies such as BTC and XRP are not dependent on a central bank and are not able to rig the system in favour of any particular entity.
This feature may be enough to get a number of nations to agree that they should no longer be dependent on a single boss.
“If it’s not the boss’s choice, you know, if it makes a bunch of people who are into cryptocurrency rich, I don’t think that’s a bad thing.”
- David Schwartz, CTO of RIpple
The enthusiasm for the future of XRP, as it expands into the world of banking and competes with the USD as an alternative reserve currency, was shared not only by members of the RIpple community, but also by other prominent figures.
For example, the CEO of the Strategic Business Innovator Group (SBI) predicted at the Osaka Expo in 2019 that RIpple’s technology would be adopted by all banks in Japan by 2025.
However, the optimism of Ripple’s experts needs to be put into context with the real development scenarios of the global currency economy.
Although XRP is indeed a very fast moving crypto with negligible commission costs, it is unlikely that it can really challenge the USD and replace it as a reserve currency.
Moreover, the BRICS are currently considering a new currency that could challenge the dollar’s hegemony and break its decades-long reign.
If we really had to think about a decentralised cryptocurrency that could play this delicate role in the coming years, the choice would be Bitcoin first and then perhaps, but with little likelihood, another altcoin such as XRP.
XRP-USD Chart Analysis: Crypto shows signs of weakness
Analysing the XRP-USD chart on Bitstamp, we can see that the crypto has been struggling in recent days, with the price being crushed below the 10-period moving average on a daily timeframe.
After the 13 July pump, which saw the crypto asset surge 73% on the back of a court victory against the SEC, the currency has struggled to find a support zone, returning to its pre-rally price in just under two months.
Since the beginning of 2023, however, the overall trend remains positive, with XRP up around 45%, broadly in line with BTC’s performance.
Looking at the chart over a longer time frame, we can see that the situation is starting to get complex for the crypto, which is currently in a strong demand zone.
Just coinciding with $0.5 is the local top of October 2022, as well as a cluster of September 2021 and other areas where a lot of trading has taken place in the past.
The upcoming weekly candles will be crucial in understanding the currency’s future price action: if the selling pressure continues, we could easily see a return to $0.38 and then $0.32.
On the other hand, if we see a bullish recovery, the challenge would be to regain $0.55 (50 SMA resistance), then $0.6 and then $0.8.
Given the directionality of the RSI, the low volume and the way the July pump was rejected by the bears, we are likely to see a decline in the coming weeks.
Be on your guard, traders.
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