Ripple Preferring Low XRP Price for Payments is Senseless: Ripple CTO

The Ripple CTO David Schwartz has recently debunked claims that Ripple would prefer to see the price of XRP low for its payment offerings, branding it nonsensical.

In a recent discourse, Ripple’s Chief Technology Officer, David Schwartz, addressed concerns and theories surrounding the preferred pricing of XRP for payments, stating that the idea Ripple favors a lower XRP price for its utility in payments is fundamentally flawed. 

Potential Impact of Ethereum Securities Classification 

This clarification from Schwartz emerges amidst a broader discussion on the regulatory environment surrounding cryptocurrencies, notably Ethereum’s potential classification as a security by the SEC and the implications of Ethereum’s transition to proof-of-stake (PoS).

Molly Elmore, Chief Marketing Officer at Valhill Capital, sparked the debate with speculation regarding alleged maneuvers from Ethereum founders and the potential impact of a possible classification of Ethereum as a security, especially concerning staking.

Let’s say for a minute that “staking” a do dedo asset that rewards validators using POS is considered a security.

There are rules around who can buy legally securities, and in some instances, are limited to accredited investors.

Prometheum is pushing for ETH to be considered a…

— Molly Elmore (@mollyelmore22) March 30, 2024

Elmore speculated on a series of events, including Ethereum’s transition to a Proof-of-stake (PoS) mechanism and BlackRock’s subsequent decision to start tokenizing assets on Ethereum. Recall that BlackRock launched BUIDL, its first tokenized fund on Ethereum, last month.

This development came up nearly two years after Ethereum switched to PoS, but Elmore believes they are strategically related. According to her, the Ethereum insiders want to declare ETH staking as a securities offering, allowing only accredited investors and institutions to benefit from it.

– Advertisement –

She claims this could be a move from Ethereum insiders and BlackRock to push institutional players to Ethereum in an attempt to bolster the adoption of tokenization on the network. However, it is important to note that Elmore’s insights are speculative.

Ripple CTO Responds

Schwartz expressed confusion over the notion of staking as a security. He emphasized the distinction between the token itself and the act of staking, highlighting that the latter is a service provided by the system rather than a transaction of securities. 

I don’t understand how to make sense of this. If staking is a security, why do rules around who can buy securities matter? Nobody sells or buys staking itself since it’s a service provided by the system itself. 1/2

— David “JoelKatz” Schwartz (@JoelKatz) March 30, 2024

Further, the conversation took a turn when an XRP community member voiced concerns over misinterpretations of Schwartz’s past statements. According to him, some community figures argue that the Ripple CTO never meant to say XRP needs to be priced high to be efficient in payments.

Recall that Schwartz previously noted in 2017 that XRP’s utility in payment means that the asset cannot be “dirt cheap.” Responding to the recent inquiry, the Ripple CTO reaffirmed his stance that a higher price of XRP enhances its practicality for payments and as an intermediary asset. 

I did say that the higher the price of an asset with a fixed supply, the more practical it is to use that asset for payments or as an intermediary asset. The argument I was responding to at the time was that Ripple would like to see the price of XRP go down because XRP would be…

— David “JoelKatz” Schwartz (@JoelKatz) March 30, 2024

He confirmed that he previously made this known while attempting to address misconceptions some holders hold that Ripple would want XRP to have a low price for it to be efficient in payments. Some individuals believe Ripple used bots to keep the price of XRP low. According to Schwartz, this notion is nonsensical.

In his words:

“The argument I was responding to at the time was that Ripple would like to see the price of XRP go down because XRP would be more useful for payments if it were cheaper. That argument is nonsensical.”