XRP and Stablecoins at the Exchange Point: Competition for the Future of Cross-Border Payments

The expansion of RippleNet sparks a fundamental debate in the financial industry: Do banks really need XRP for international transactions, or are established stablecoins sufficient? A German market observer argues that XRP has long evolved beyond the status of a mere cryptocurrency and now serves as a central bridge layer for value transfer between financial institutions. This thesis gains weight when considering the previous adoption history of the Ripple ecosystem—particularly the success story of GTreasury, the company’s treasury management software.

Since Ripple’s acquisition of GTreasury for around one billion USD, the solution has been implemented over 13,000 times in financial institutions worldwide. These figures suggest that Ripple’s technology stack is increasingly embedded in the systems of major banks. But here lies the critical point: do these institutions really need the native asset XRP to optimize their business models?

The technical reality: RippleNet works without XRP

A key criticism in this debate is that banks can fully utilize the RippleNet network without ever touching XRP. Instead, they could rely on stablecoins—digital assets pegged to fiat currencies that eliminate the feared price volatility of cryptocurrencies. This not only spares them from volatility but also provides the stability traditional financial institutions are accustomed to.

Proponents of XRP, however, present technical arguments that are often underestimated in this debate. They emphasize that XRP transactions and settlements occur in seconds—a speed that practically neutralizes volatility risks at the exchange point. While stablecoins’ prices remain stable, banks using them must accept a different counterparty dependency: they are necessarily tied to the issuer and cannot guarantee redemption.

The liquidity paradox: ODL versus fixed reserves

A major technical difference lies in how liquidity is sourced. Stablecoins operate with fixed, pre-held reserves—a centrally controlled system that can lead to bottlenecks at scale. XRP, on the other hand, uses the so-called On-Demand Liquidity (ODL) model, a decentralized system that mobilizes liquidity in real-time across multiple trading venues.

This ODL system reduces several risk factors simultaneously: counterparty risk (dependence on a single institution), redemption risk (inability to repay), and enables greater scalability for complex, multilingual cross-border payment corridors. For financial institutions handling millions of transactions worldwide, this could indeed be the decisive factor.

Market sentiment and ETF hopes keep the tension

Current market sentiment around XRP is shaped by several factors. On one hand, speculation about a potential spot XRP ETF raises hopes—such a financial product could significantly boost demand from institutional investors. On the other hand, economic uncertainties have at times delayed SEC approval of such instruments.

Nevertheless, market observers maintain expectations: if regulatory hurdles are cleared and positive news from Washington follows, this could create a direct multiplier effect on XRP demand. An ETF approval would not only diversify financial products around XRP but also accelerate the entire RippleNet ecosystem and intensify demand for the underlying technology and the digital asset itself.

The current price movement of XRP at $1.37 (as of March 2026) with a 24-hour change of -0.72% shows a market capitalization of $84.13 billion—an indicator of ongoing institutional confidence in the project despite all conceptual debates.

Conclusion: Technology versus necessity

Whether banks truly need XRP or if stablecoins are sufficient remains an open question that must be answered not only technically but also economically and regulatorily. The market will ultimately decide where scalability, cost efficiency, and risk management intersect. RippleNet, with GTreasury and ODL, has provided the technical infrastructure for this point—whether institutions choose to use XRP themselves remains their strategic decision.