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

Ripple CTO Emeritus David Schwartz has reacted to a stablecoin prediction by Columbia Business School adjunct professor Omid Malekan.

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.”

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.

This caught the attention of Ripple CTO Emeritus David Schwartz, who sought further clarification on this.

“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.

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.

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.

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