XRP effectiveness debate..."On-chain payments are minimal"

Controversy is once again spreading regarding the real-world on-chain utility and network validity of XRP.

It began with a post on X (formerly Twitter) by Andrei Jikh, an American finance YouTuber with 2.68 million subscribers. Jikh pointed out, "Even though 13 years have passed since the launch of XRP, there are still no significant on-chain payments being made through the public blockchain XRP Ledger (XRPL)."

He continued, "If XRP is really a bridge currency for global remittances, why aren't there tens of billions of dollars in daily transactions right now? What's the point in using a volatile asset like XRP for payments? Stablecoins or central bank digital currencies (CBDCs) could easily serve the same function."

The post prompted hundreds of shares and comments, eventually drawing a direct response from David Schwartz, CTO of Ripple.

CTO Schwartz acknowledged, "It's true that the pace of on-chain adoption is slower than expected," but added, "Even Ripple itself can't currently use the XRPL-based decentralized exchange (DEX) for real-world payments. Due to concerns like terrorist organizations supplying liquidity, it’s difficult for regulated institutions to use it."

Addressing concerns about XRP’s price volatility, he argued, "The transaction speed is fast, so the risk is limited. And by nature, someone must be holding the bridge currency at any given moment in order to provide liquidity when needed." However, he also stated, "The transparency of on-chain transactions is still a burden for institutions," and that "Ripple is considering features to mask sensitive information."

To arguments that the expansion of CBDCs and national stablecoins makes it less necessary to use volatile assets like XRP, Schwartz responded, "It is difficult for a stablecoin to achieve global dominance," and "In a landscape with many competing stablecoins, there is still a role for a neutral bridge asset like XRP."

However, even insiders at Ripple acknowledge that on-chain adoption of XRP is not proceeding quickly. Former Ripple executive Matt Hamilton revealed, "Most of the 300 banks partnered with Ripple use RippleNet, an off-chain system, rather than the XRP Ledger."

A community user pointed out, "XRP now lacks smart contract functions, and its total value locked (TVL) ranks only 48th. Its validator structure is also centralized," arguing that "for institutions, ecosystems like Ethereum look more attractive." Jikh also said, "Major companies like BlackRock and Robinhood are already tokenizing assets on platforms like Arbitrum (ARB) or their own proprietary infrastructures," and "there's little reason to choose XRP."

In response, Schwartz used Circle, the issuer of USDC, as an example: "Circle doesn't have its own blockchain either, but operates USDC across multiple chains," emphasizing, "What’s important isn’t a single chain, but a multi-chain distribution strategy and interoperability."