It makes no sense for Ripple to prefer low XRP prices for payments: Ripple CTO

Ripple CTO David Schwartz recently debunked claims that Ripple prefers to keep the XRP price low for its payment services.

In a recent discourse, Ripple’s Chief Technology Officer (CTO) David Schwartz addressed the concerns and theories surrounding XRP’s preferred price for payments, saying that the idea that Ripple favors low XRP prices for payment utility is fundamentally flawed. .

Potential Impact of Ethereum Securities Classification

These comments from Schwartz come amid a broader discussion about the regulatory environment surrounding cryptocurrencies, specifically the potential for Ethereum to be classified as a security by the SEC and the impact of Ethereum’s transition to proof-of-stake (PoS).

Molly Elmore, Valhill Capital’s Chief Marketing Officer (CMO), Possible classification The use of Ethereum as a security, especially when it comes to staking.

Let’s assume for a moment that using POS to “stake” digital assets that reward validators is considered security.

There are rules about who can legally purchase securities, in some cases limited to accredited investors.

Prometheum is pushing to consider ETH as:

— Molly Elmore (@mollyelmore22) March 30, 2024

Elmore speculated about a series of events, including Ethereum’s transition to a proof-of-stake (PoS) mechanism and BlackRock’s subsequent decision to begin tokenizing assets on Ethereum. remember that BlackRock launches BUIDLIt was the first tokenized fund on Ethereum last month.

This development comes nearly two years after Ethereum’s switch to PoS, but Elmore believes the two are strategically related. According to her, Ethereum insiders want to declare ETH staking a securities offering so that only accredited investors and institutions can benefit.

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She claims this could be a move by Ethereum insiders. black stone Push institutional players to Ethereum to strengthen tokenization adoption on the network. However, it is important to note that Elmore’s insight is speculative.

Ripple CTO’s response

Schwartz expressed confusion about the concept of staking as a security. He emphasized the distinction between the token itself and the act of staking, emphasizing that the latter is a service provided by the system rather than a securities transaction.

I don’t understand how to understand this. If staking is a security, why do the rules about who can purchase the security matter? Staking itself is a service provided by the system itself, so no one buys or sells it. 1/2

— David “JoelKatz” Schwartz (@JoelKatz) March 30, 2024

The conversation also took a turn when XRP community members expressed concerns about misinterpretations of Schwartz’s past statements. According to him, some community figures claim that the Ripple CTO never meant that XRP should be priced high to increase payment efficiency.

remember schwarz previously mentioned XRP’s payment utility in 2017 means the asset cannot be “very cheap.” In response to a recent inquiry, Ripple CTO reaffirmed his position that the higher the price of XRP, the more practical it becomes as a payment and intermediary asset.

I mentioned that the higher the price of an asset with a fixed supply, the more practical it is to use that asset as a settlement or intermediary asset. The argument I was responding to at the time was that Ripple wanted to see the price of XRP fall. Because XRP…

— David “JoelKatz” Schwartz (@JoelKatz) March 30, 2024

He previously confirmed this as he attempted to address the misconception among some holders that Ripple would want XRP to have a low price to make payments more efficient. Some people believe that Ripple used bots to keep the price of XRP low. According to Schwartz, this concept is meaningless.

According to him:

“The argument I was responding to at the time was that Ripple wanted to lower the price of XRP because it would be more useful for payments if it were cheaper. “That claim is nonsense,” he said.