Former Ripple CTO Gives 3 Reasons Banks May Choose XRP Over Stablecoins

Ripple’s former CTO, David Schwartz, recently clarified a 2017 statement regarding XRP pricing, explaining that it was a technical explanation about XRP’s utility, not a prediction of high valuation. The original context had been misinterpreted, leading to widespread confusion about his intent. He emphasized that XRP’s price is tied to its practicality in large-value transactions and market impact.

Schwartz outlined three main reasons XRP may be preferred over stablecoins in certain banking applications. These include its multi-currency flexibility, resistance to censorship, and potential for long-term value appreciation. These attributes make XRP a compelling alternative in cross-border transactions and multi-jurisdictional use cases.

Institutional interest in XRP has grown significantly in recent months. Franklin Templeton’s Crypto Index ETF now includes XRP as its third-largest holding with a 5.91% portfolio weight. This reflects the fund's strategy to diversify crypto exposure beyond Bitcoin and Ethereum.

Why Are Banks Considering XRP Over Stablecoins?

Stablecoins are tied to specific fiat currencies, making them less flexible for international transactions. XRP, in contrast, supports multi-currency environments and is not subject to the same regulatory risks. This flexibility can be critical for institutions operating across multiple jurisdictions.

Banks may also prefer XRP due to its resistance to censorship. Unlike stablecoins, which can be frozen or revoked by their issuers, XRP operates on a decentralized network. This makes it more attractive in environments where regulatory uncertainty or control are concerns.

The potential for XRP to appreciate in value is another factor. While stablecoins maintain low volatility, they offer little upside. XRP, on the other hand, could provide long-term gains for banks holding it in escrow or for future value growth.

What Does ETF Inclusion Mean for XRP?

The inclusion of XRP in major ETFs like Franklin Templeton’s Crypto Index ETF highlights growing institutional confidence in the asset. At the end of 2025, XRP held a 5.91% weight in the fund, a slight decline to near 5.85% in early 2026.

Teucrium’s XRP ETF further demonstrates this trend, raising over $500 million in just 12 weeks. This paper-based ETF has attracted strong inflows, suggesting that investors are increasingly comfortable with indirect exposure to XRP.

The success of these ETFs also reflects a broader shift in how investors access crypto. Regulated financial products are becoming a preferred route for institutional and retail investors who want exposure without managing digital wallets.

What Are Analysts Watching Next?

Market analysts are closely monitoring how banks and financial institutions allocate their crypto portfolios. XRP’s performance in cross-border transactions and its adoption in regulated ETFs are key indicators of its future utility.

Investors are also watching how XRP competes with stablecoins in different markets. While stablecoins offer low volatility, XRP’s advantages in flexibility and potential upside make it a viable alternative in specific use cases.

The growing presence of XRP in ETFs and its inclusion in major institutional portfolios suggest that the asset is becoming more mainstream. As Ripple continues to expand its vision beyond payments, XRP’s role in global finance may evolve further.