Ripple CTO Emeritus Challenges 'No-Freeze' Stablecoin Idea, What Are Risks?

Cover image via U.Today Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available. Ripple CTO Emeritus David Schwartz has reacted to a stablecoin prediction by Columbia Business School adjunct professor Omid Malekan. Advertisement Malekan predicted that, in the years to come, a stablecoin issuer will differentiate itself by its refusal to intervene or freeze and seize, pushing this to the boundaries of what is possible legally. Malekan speculates that "this will be a killer GTM strategy and take massive marketshare." The Columbia Business School professor explains the potential logic behind this: "Everyone and their mother is going to issue a stablecoin, but they are notoriously difficult to differentiate. As Tolstoy said, every narrow bank is the same, fractional-reserve banks are each fractional in their own way." HOT Stories Shiba Inu's (SHIB) Last Chance, Will XRP Hit $2 Again? Bitcoin (BTC) Bull Run Denied, Could $60,000 Be Next? Crypto Market Review Ripple Reveals Economic Impact of Its Donation Malekan argues that neutrality and nonintervention will be one of the few ways a stablecoin can distinguish itself, and this will appeal to DeFi a great deal and, likely, most users. Advertisement This caught the attention of Ripple CTO Emeritus David Schwartz, who sought further clarification on this. You Might Also Like Sat, 11/29/2025 - 11:44 Ripple's David Schwartz: Being CTO Is Pretty Wild By Tomiwabold Olajide "Explain to me how this would work," Schwartz asked, saying that the whole point of a stablecoin is that it represents a legal obligation of the issuer to redeem for fiat. A court order does, in fact, dissolve that legal obligation because that is the effect court orders have on legal obligations, Schwartz added. Advertisement Explain to me how this would work. The whole point of a stablecoin is that it represents a legal obligation of the issuer to redeem for fiat. A court order does in fact dissolve that legal obligation because that's the effect court orders have on legal obligations. If a court… — David 'JoelKatz' Schwartz (@JoelKatz) April 3, 2026 The Ripple CTO further asked, if a court dissolves the legal obligation that the stablecoin represents and do not freeze and seize it, then what happens? He questioned the no-intervention model presented by Malekan. Other questions posed by the Ripple CTO emeritus, which appear to follow the stablecoin model predicted by Malekan, "Whoever tries to redeem it for the underlying money gets nothing? What happens over time? Some of the stablecoins represent legal obligations of the issuer and some don't. So it becomes a fractional reserve? Is redemption first come, first served?" XRP Ledger strengthens compliance With features that have gone live and some yet to go live, XRP Ledger is strengthening compliance for its users. You Might Also Like Sun, 03/29/2026 - 11:08 XRP Ledger Drops Below Key 1 Million Threshold, but It Is Perfect Opportunity By Arman Shirinyan In 2025, the deep freeze feature was activated on the XRP Ledger. It ensures that flagged addresses cannot send or receive tokens until their trust line is unfrozen, allowing compliance for issuers. Deep Freeze remains a critical safeguard for stablecoin issuers and RWA providers on the XRP Ledger that blocks illicit transfers, while maintaining transparency across payments, DEX and AMM activity. #Ripple News #XRP Ledger