There has been a longstanding debate on XRP use in Ripple’s new Liquidity Hub. Attorney John E. Deaton, a vocal supporter of the token, recently sought a debate on whether Ripple’s choice to remove the asset was wise business or a betrayal.
In response to that, a senior community software engineer at the blockchain firm Neil Hartner took to Twitter to address some of the reasons.
According to Hartner, XRP is more suitable for ODL and not for the Liquidity Hub because the licensing requirements for these two platforms are different.
In the series of tweets, the engineer explained that in ODL, the sender and recipient directly settle payments, and Ripple serves as an intermediary to make the transaction possible. Thus, the firm is not a counterparty and XRP can be utilized in ODL without triggering any legal or regulatory problems.
However, Ripple is positioned in the center of the transaction in the Liquidity Hub, making the business a counterparty. This adds new statutory and regulatory standards that the token might not be able to meet. Ripple does not need XRP to function, Hartner claimed.
Following successful testing last year, the Ripple Liquidity Hub for businesses went live on April 13 to bridge the gap between cryptocurrencies and fiat.
Notably, there was no mention of the token during the product launch, drawing flak from the community because it was among the digital assets mentioned in the product’s pilot phase.
For context, On-Demand Liquidity [ODL], is a technology largely used for cross-border payments, and leverages XRP; hence, the asset’s omission from the Liquidity Hub came as a big surprise to the community.
XRP Community Not Satisfied With Ripple’s Move
Ripple, in response to the hue and cry from the XRP fans, updated its blog post on the Liquidity Hub with further details about the assets that are now available and why.
The blog post also added the following: “XRP will be evaluated along with other tokens for support within the product. We look forward to supporting it as it receives regulatory clarity in the U.S.”
While Hartner addressed the ODL portion, more questions remain unanswered, such as why XRP was dropped since 90% of Ripple Biz is conducted outside of the US or how long the token would be sidelined if it takes 3-5 more years of courts, etc.