XRP, the third largest cryptocurrency on CoinMarketCap, rose as the collective coin market pumped on the back of Bitcoin’s bull run. However, Ripple has always been ready to hype XRP and David Schwartz’s statement on Stellar Lumens’ partnership with IBM has done the same. According to Ripple’s Chief Technology Officer [CTO], David Schwartz, the partnership misses the point of blockchain completely.
In a recent AMA session on Quora, Schwartz answered many questions about Ripple, XRP and the partnership between IBM and Stellar. The CTO said,
“The root problem is that global payments infrastructure is centralized – IBM, SWIFT, and the rest of the old guard attempt innovation with blockchain, but do not solve the centralization issue. IBM has positioned itself as the central operator of the Stellar network, meaning it approves all validators and therefore controls the transactions.”
Schwartz said that he did not understand the use of stablecoins, because even though banks have approvals for issuing their own stablecoins, they are not going to make use of each other’s stablecoin. The CTO continued,
“Or go from their stablecoin to Lumens to the other bank’s stablecoin? With the goal of mass adoption, a universal bridge asset has to be geopolitically neutral, and a USD-backed stablecoin doesn’t solve for that. I don’t see how centralized stablecoins can be part of global pools of liquidity that anyone can contribute to and draw off of.”
Schwartz’s statement is similar to that of Ripple CEO Brad Garlinghouse, who had this to say when JP Morgan coin was launched,
“As predicted, banks are changing their tune on crypto. But this JPM project misses the point- introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer”
Garlinghouse was also quoted talking about the use of coins issued by banks, stating that a digital asset issued by a bank can only settle efficiently between banks who have issued it. However, the concerns pointed out by Schwartz over centralization ail Ripple too.
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