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Renowned economist Peter Schiff raised concerns over the inclusion of XRP in the cryptocurrency reserve announced by President Donald Trump on Sunday. Schiff, a long-time critic of cryptocurrencies except for Bitcoin, acknowledged the rationale for including Bitcoin in the reserve due to its status as “digital gold.” However, he questioned the justification for XRP’s inclusion, arguing that the asset lacks the fundamental characteristics necessary to serve as a reserve currency. His remarks sparked discussions across the crypto community, particularly among XRP supporters, who see the token as a valuable asset for cross-border payments and liquidity management. XRP, created by Ripple Labs, has been one of the most contested digital assets, facing regulatory scrutiny, including the ongoing legal battle with the SEC over its classification as a security.
From a financial perspective, Schiff’s skepticism is rooted in traditional economic principles that value widespread adoption and decentralization as key factors for selecting reserve assets. While Bitcoin has positioned itself as a store of value comparable to gold, XRP serves a different purpose in the financial ecosystem—primarily as a bridge asset for facilitating international transactions. Its inclusion in the cryptocurrency reserve could indicate that policymakers recognize its utility in banking and remittance sectors. However, XRP’s centralized governance model and its legal uncertainties introduce potential risks that make its selection controversial. Investors responded to Schiff’s comments with mixed reactions; while some backed his view, others pointed out that XRP’s partnerships with financial institutions, such as those utilizing Ripple’s On-Demand Liquidity (ODL) service, make it a viable asset in a global digital finance strategy.
Charles Hoskinson, the founder of Cardano (ADA), also weighed in on the discussion, offering a different perspective. Hoskinson, known for his critical stance on certain aspects of the crypto industry, sided with Trump’s decision, emphasizing the need for asset diversification in any financial reserve strategy. According to Hoskinson, Bitcoin alone might not be sufficient for constructing a modern crypto-backed reserve, especially as institutional adoption of digital assets gains momentum. He stressed that alternative cryptocurrencies like XRP and even Cardano’s ADA provide strategic advantages due to their transaction efficiencies and technological innovations. This highlights a broader debate within the crypto space on whether multiple assets, rather than just Bitcoin, should be recognized as legitimate parts of national reserves moving forward.
The market reacted swiftly to the news, with XRP experiencing heightened volatility amid the controversy. Bitcoin remained stable above key support levels, benefiting from Schiff’s reaffirmation of its role as a digital store of value. Meanwhile, Cardano’s ADA saw a modest uptick following Hoskinson’s comments, as investors viewed his remarks as a broader endorsement of diversification. The debate over cryptocurrency reserves underscores the evolving nature of digital assets in the financial sector and raises critical questions about how governments and institutions will approach cryptocurrency adoption in the coming years. As regulatory clarity improves and institutional interest intensifies, the selection of digital assets as national financial reserves will likely remain a hot topic, influencing investor sentiment and shaping the future of the crypto market.
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