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David Schwartz, the Ripple CTO, has reiterated his stance on XRP pricing and its role in payments.
His latest comments emerged in response to an investor questioning XRP’s underwhelming price performance since 2017. In the recent commentary, he further discussed how XRP has not realized its full potential in payment systems, despite widespread availability and favorable features.
Ripple CTO Remains Firm
Recall that, in a conversation dating back to November 2017, Schwartz had argued that XRP cannot remain cheap if it is to function effectively as a medium for high-value payments.
He pointed out that regardless of whether XRP trades at $1 or $1 million, the cost of a $1 million transaction would still be equivalent to $1 million. However, he added that higher prices would facilitate cheaper payments.
A higher-priced XRP would reduce the market impact of transactions, making them more efficient and practical for large transfers, a quality that was harder to achieve when XRP traded for mere cents.
At the time of this conversation in 2017, XRP’s price hovered between $0.17 and $0.28. Fast forward to 2024, and while the cryptocurrency has experienced substantial volatility, it is currently trading at around $0.54. This modest 92% increase stands in contrast to Bitcoin, which has surged by more than 500% over the same period.
Understandably, this has caused frustration among some investors, leading one to sarcastically remark that XRP is still “dirt cheap” despite Schwartz’s earlier assertions.
Schwartz responded to the comment by maintaining his original argument: the cost of using XRP for payments scales proportionally with its price. As a result, whether XRP trades for $1 or higher, the end result in large-scale transactions remains the same. Higher prices simply make payments less disruptive to the market.
Last I checked, $1 million worth of XRP still costs $1 million so making a $1 million payment with XRP will cost at least $1 million.
— David "JoelKatz" Schwartz (@JoelKatz) September 20, 2024
XRP is Widely Available, but Crypto Payment is Limited
Meanwhile, an XRP community member accused Schwartz of sidestepping the issue. The community figure argued that XRP’s continued low price suggested that Ripple had not achieved its goal of positioning the cryptocurrency as a key player in payments.
However, Schwartz remained firm. He pointed out that while XRP’s price may not have skyrocketed, the altcoin boasts several advantages that make it ideal for payments: wide availability, a top-five position by market cap, low transaction fees, and rapid confirmation times.
Virtually no crypto is being used for payments. XRP has wide availability, it's a top 5 in market cap, and has low fees and fast confirmations. I don't think it's used more for payments for the same reasons that no cryptos are really being used for payments much today.
— David "JoelKatz" Schwartz (@JoelKatz) September 21, 2024
Despite these advantages, Schwartz acknowledged that XRP, like most cryptocurrencies, is not widely used for payments today. He explained that this lack of adoption is not unique to XRP. Instead, it is a broader industry trend.
The Ripple CTO confirmed that there are reasons behind this slow adoption but failed to mention them. However, some have argued that some of these reasons include the complexities involved in integrating digital currencies into traditional financial systems as well as regulatory hurdles.