Here’s How RLUSD Will Amplify XRP Role, Not Diminish It

Leading XRP community voices are pushing back against concerns that the Ripple stablecoin RLUSD will overshadow XRP’s utility.

Instead, they argue that RLUSD will strengthen XRP’s role within the XRP Ledger (XRPL) ecosystem.

XRP Still Dominates Pathfinding

According to analysis shared by the “All Things XRP” account, XRP remains central to transaction routing on the XRPL due to its status as the native bridge asset. The network’s pathfinding algorithm automatically defaults to XRP when identifying the most efficient route for cross-currency payments.

This gives XRP a unique advantage over any newly introduced asset, including RLUSD. XRP continues to offer faster execution, lower costs, and greater liquidity than most stablecoins can match.

RLUSD Complements, Not Competes

The RLUSD stablecoin seeks to bring price stability to the XRP Ledger, particularly for institutional settlements and treasury operations. Rather than competing with XRP, RLUSD expands the network’s functionality by addressing a need that XRP, as a volatile asset, is not designed to fulfill.

By introducing RLUSD, Ripple is not replacing XRP but rather broadening the ecosystem it supports. As institutions adopt RLUSD for specific use cases, their activity on the XRPL could grow and boost XRP liquidity and usage through increased transaction volumes.

Despite the buzz surrounding RLUSD’s adoption, “All Things XRP” emphasized that XRP still dominates in key areas: instant cross-border payments, On-Demand Liquidity (ODL) services, and as a bridge asset for multi-currency transactions.

The message is that RLUSD is a value-add, not a threat. Integrating a native stablecoin like RLUSD enhances the XRPL ecosystem and further reinforces XRP’s importance.

“All Things XRP” summed it up by stating that those betting against XRP in light of this development are, in effect, betting against the design of the entire ledger.

Ripple CTO on XRP and RLUSD Utility

Previously, Ripple CTO David Schwartz reassured the XRP community that XRP remains essential to the XRPL.

While RLUSD may serve specific applications such as payment settlements, Schwartz confirmed that only XRP can pay XRPL transaction fees. While acknowledging that stablecoins might reduce XRP’s utility in specific contexts, Schwartz clarified that RLUSD will not replace XRP’s core functions.

He explained that volatile assets like XRP are crucial for some DeFi use cases. At the same time, stablecoins play an essential role in others, such as pricing, trading, and fund storage.

Essentially, RLUSD will expand use cases without diminishing XRP’s central function as a bridge asset.

Interestingly, community members have suggested raising XRPL fees to increase XRP scarcity. Schwartz opposed the idea of using artificial scarcity as a value strategy. He maintained that the XRPL should prioritize utility over speculation and noted that such decisions require broad consensus.

Ripple CEO’s View

Notably, Ripple CEO Brad Garlinghouse echoed this sentiment. He described RLUSD as a complementary tool that enhances liquidity and improves access, without undermining Ripple’s ongoing commitment to XRP’s growth.

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