Ripple CTO Goes WWF, Wrestles and Criticizes Stellar Blockchain’s Partnership With IBM
Recently, David Schwartz, the CTO of Ripple did a Q&A session with Quora, where he spoke about numerous questions around Ripple.
IBM Blockchain World Wire uses Stellar protocol to make it easier for financial institutions to clear and settle cross-border payments in a matter of seconds. For this, six international banks, out of which three are identified viz. Brazil’s Banco Bradesco, Philippines-based RCBC, and Bank Busan of South Korea have signed letters of intent to issue tokens or stablecoins backed by fiat currency on World-Wire.
The network went live on March 18th. Apart from issuing tokens, the network also provides the choice to use Lumens, the native token of Stellar blockchain to be used as the bridge currency.
However, David thinks that it misses the point of blockchain. He states:
“It misses the point of blockchain completely. 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.”
Additionally, he claimed that he doesn’t buy the hype around stablecoins. He says:
“The use of stablecoins doesn’t make sense to me – even if all these banks got regulatory approval to issue their own stablecoins, would they all use each other’s stablecoins? 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.”