Ripple CTO Explains Why Financial Institutions Are Reluctant to Adopt XRP in Remittances
XRP has dropped approximately 17% while Bitcoin has rallied over 48% in the past twelve months.
As notable global financial players including PayPal Holdings Inc (NASDAQ: PYPL) recently enter the crypto industry, major digital assets have significantly benefited. However, XRP, which is heavily controlled by Ripple, lags behind as it continues to face regulatory clarity issues, especially in the United States. Last week Ripple CTO David Schwartz went to his Twitter page to explain the reason why financial institutions are reluctant to adopt XRP as a bridge asset.
XRP and the Community Outrage
The cry from the XRP community that continues to absorb Ripple’s market dump to fund the company’s projects seems to be increasing by the day.
In its monthly escrow release, Ripple received 1 billion XRP. According to the Twitter bot @XRP_EscrowBot, Ripple locked back 900 million XRP and ended up with 100 million to dump into the market. This comes even after the company had previously indicated that there will be no more programmatic sales. As a result, Ripple eats away the majority of XRP market demand in expense of the retail customers.
At the time of writing, XRP was trading around $0.240632, having added approximately 2.8% in the past 30 days according to metrics provided by CoinGecko.
Notably, in the past 30 days, Bitcoin has rallied approximately 30% whereby at the time of writing it was trading around $13,671.67. Apparently, XRP has dropped approximately 17% while Bitcoin has rallied over 48% in the past twelve months, hereby attracting outrage from the XRP community over lack of market growth.
David Schwartz’s Response
Schwartz was responding to a comment that likened his tweets to those of John McAfee, who has in the past made predictions that never materialized. In his defense, Schwartz said that he did not make any monumental prediction in his past tweets but instead clarified that they are in a wait and see game.
He indicated that there are hurdles that the company has to deal with to enhance XRP adoption. According to him, the company has done most of the technical work and only remains for the bank to adopt their system. However, with the lack of clarity on whether XRP is a security or a digital asset, its market adoption lacks the needed momentum.
Notably, Ripple recently partially won its lawsuit case in California but there remain about four of the initial charges to be ruled for the case to be completed.
In addition, Schwartz indicated that existing financial institutions are not using XRP for “fear of reprisals from existing partners”. According to him, financial institutions that are willing to use XRP as a bridge asset have zero customers since the product is new.
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