Former Ripple Director Identifies Three Advantages of Cryptocurrencies Over Stablecoins, 2026/04/06 12:30:18

Former Ripple Chief Technology Officer David Schwartz outlined three reasons why cryptocurrencies might be more advantageous for financial institutions compared to stablecoins backed by fiat currencies.

As his first point, he highlighted the limitation of stablecoins: they maintain stability only in relation to a specific currency to which they are pegged. Consequently, dollar-pegged stablecoins cannot shield banks and companies operating across various jurisdictions with multiple fiat currencies from fluctuations in other national currencies. Thus, Schwartz argues that stablecoins are not as stable as they may seem.

He also pointed out the risk of fund freezing. Stablecoins can be frozen by their issuers due to court orders or regulatory demands. If a government deems a stablecoin holder to be involved in terrorism financing or other illegal activities, the individual would have no means to protect their assets from being frozen or themselves from legal action. In his view, stablecoins fail to provide true financial freedom.

The third reason, according to Schwartz, is that with regular altcoins, users can benefit from price appreciation, which is not possible with stablecoins that have a fixed value.

“If you are not focused on stability, in many scenarios you would prefer cryptocurrency over stablecoins. If I had to place funds in an escrow account for a year, I would choose XRP or BTC over the US dollar, because the dollar is unlikely to appreciate,” Schwartz stated on the social media platform X.

Previously, Schwartz mentioned that in the early stages of Ripple’s development, the company’s leadership was skeptical about the prospects of its own cryptocurrency XRP and considered selling it as a means to sustain the business.