Phil Kwok: XRP Was Built As Bridge Currency. Here’s My Thesis On What Happens Now

As countries look for ways to reduce their reliance on the US dollar, EasyA co-founder Phil Kwok believes XRP’s original purpose deserves another look. He noted that the asset could help facilitate cross-border transactions between currencies without tying the process to any single government.

Kwok explained that the XRP Ledger was designed to address a problem in currency exchange. Moving money between different currencies often requires access to liquid trading pairs. When those pairs lack sufficient liquidity, transactions can become more expensive or difficult to execute.

Through auto-bridging, the XRP Ledger can use XRP as an intermediary when exchanging two currencies. This approach could help connect markets that lack efficient direct trading pairs.

Why Stablecoins May Not Be Enough

Kwok acknowledged the growing role of stablecoins, including RLUSD, the US dollar-pegged stablecoin issued by a Ripple subsidiary. These assets allow people to hold and transfer dollar value without necessarily opening a US bank account.

However, Kwok believes stablecoins leave an important question unanswered: what happens when two parties want to transact without relying on a currency associated with a particular country?

“There needs to be something sitting in the middle which isn’t affiliated with a particular government,” Kwok said. He described XRP as an asset “designed for this precise use case.”

Geopolitical Tensions Could Change the Equation

Kwok believes current global tensions could increase demand for alternative payment systems. He compared this possibility to the COVID-19 pandemic, which accelerated the adoption of technologies that allowed businesses to operate remotely.

“It’s providing that accelerant,” he said, suggesting that geopolitical developments could push more financial institutions toward new payment infrastructure.

“XRP was designed for that purpose long before most people understood the need. The vision was early. Now comes the real test: adoption,” Squire wrote.

Kwok argues that geopolitical changes could make a neutral bridge asset more useful. However, the need for such an asset does not guarantee that XRP will fill the role.

For now, the central question is whether financial institutions will turn XRP’s proposed use case into practical adoption. The technology supports currency-to-currency transfers, but sustained demand will determine how significant that role becomes.