As Ripple faces a lawsuit from the U.S. Securities and Exchange Commission and mass delistings from various exchanges, some may wonder if a complementary business plan is viable.

One option is for the firm to shift its focus toward stablecoins and central bank digital currencies (CBDCs) as XRP faces scrutiny.

Ripple has expressed past interest in CBDCs. In August 2020, Emi Yoshikawa, Senior Director of Global Operations at Ripple, stated that XRP “is not competing with stablecoins” or CBDCs. She added that XRP is complementary to stablecoins and can assist with settlement.

Later, in November, Ripple CEO Brad Garlinghouse acknowledged that a number of central banks are examining XRP Ledger “as open-source technology to issue stablecoins.” He noted that although Ripple was not directly involved in those activities, the firm was “trying to be helpful” to those banks.

Related to both of these statements, Ripple reasserted this January that it aims to provide a neutral bridge asset for CBDCs such as China’s upcoming digital yuan.

However, these plans largely depend on XRP as a bridge currency, meaning that this strategy is unlikely to displace XRP itself.

It is already possible for banks to issue their own custom stablecoins on XRP Ledger, as explained by Ripple CTO David Schwartz earlier this month. According to Schwartz, banks simply need to connect to a node and deposit their own financial backing to do so.

Schwartz acknowledges that the Office of the Comptroller of Currency (OCC) granted U.S. banks permission to contribute to stablecoin networks. That means that Ripple is in a better position than ever to encourage banks to issue new tokens on XRP Ledger.

Previously, Schwartz also suggested that an XRP-backed stablecoin is possible. The proposed system would allow anyone to deposit XRP and create a stablecoin of their own.

However, once again, Ripple has little hand in any third parties that decide to issue their own stablecoin.

It is clear that Ripple does not intend to issue its own stablecoin into general circulation, and it is extremely unlikely that the firm will introduce a coin comparable to Tether (USDT), DAI, or USDC.

It is much more plausible that a private bank or central bank will build a stablecoin on XRP Ledger, a decision that would be similar to Ukraine’s plans to build a stablecoin on Stellar. However, that sort of development will not necessarily generate lasting attention for Ripple if the firm does not pursue the relationship.

In light of those facts, Ripple will most likely continue to focus on settlement in general rather than stablecoins in particular, even as the legal status of XRP is scrutinized in court.

At the time of writing this author held less than $50 of Bitcoin, Ethereum, and altcoins.

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