In a recent interview with Fortune’s Jeff Roberts, Ripple’s David Schwartz spoke about the primary objective behind xRapid and the current problems faced by the company to increase XRP’s market adoption rate.
During the discussion, Schwartz stated that banks usually did not want to hold XRP in their system due to regulatory constraints. In order to solve that problem, he shared Ripple’s intent to facilitate the establishment of an xRapid entity, an entity that allows a payment company or customer to use the digital asset for buying fiat currencies and in return, offer these currencies to the banks. Schwartz strongly suggested that this solution works around the limitations set against digital asset companies.
However, in order to realize the plan, Jeff Roberts asked Schwartz if it would require a mediator or an organization that would be willing to hold large amounts of XRP and carry forward different fiat currency transactions, and whether such companies already existed or not.
Schwartz explained that such a system would be completely open, something that would be an important factor in distinguishing Ripple from its competitors. Since XRP can be held by anybody, any customer or entity could create a system of “counter-flow,” which would act as a middleman between banks and customers with the ability to settle cross-border payments. Schwartz added that Ripple had plans to initiate such counter-flow services but according to him, such services already existed within the open marketplace.
Further, Schwartz added that such services had occurred inside a closed ecosystem where such people were “netting” [transacting XRP for fiat currencies] their digital assets with other people who wanted to net their XRP in the same direction.
Schwartz also expressed his views regarding stablecoins. He believes that they are “actually helpful” by assisting customers hold digital assets and deal with the volatility attached with cryptocurrencies. Thus, stablecoins are safer to hold in a market where users can trust the issuing entity to an extent where it does not raise a problem with liquidity.