Ripple’s introduction of RLUSD – a new stablecoin – has spurred debate within the XRP community, and particularly on the platform X; members of the community are considering the utility of RLUSD not only when it is used with XRP but also within Ripple’s payment ecosystem.
According to several posts on X, some users are concerned that RLUSD could replace XRP in core functionalities such as cross-border payments. These users suggest that Ripple is shifting XRP’s use primarily to covering transaction fees rather than acting as a bridge asset
However, others in the community point to the XRP’s deeper role in liquidity facilitation. They believe that XRP is not just any utility token. It is also the necessary liquidity provider on the XRP Ledger (XRPL), thus facilitating functional asset transfers.
Before, Ripple CTO David Schwartz addressed similar concerns over XRP’s role on the XRPL. He emphasized, however, that XRP is still the only native token in the ledger and is needed for all account reserve balances.
In addition, Schwartz reasserted that transaction fees can only be paid in XRP on the XRPL. This capability emphasizes the fundamental position of XRP in the system beyond mere transactional utility.
XRP and RLUSD: Complementary Roles, Not Competition
RLUSD, an enterprise-grade stablecoin, is 100% backed by US dollar deposits, short-term government bonds, and cash equivalents. Ripple has issued RLUSD on XRPL and Ethereum blockchains to facilitate real-time settlement and inexpensive fiat on-ramps.
RLUSD exists to offer an immutable digital asset to institutions that value low price volatility. From the latest transaction data, it is clear that more than 95 percent of activities done in RLUSD have taken place on XRPL, summarizing strong adoption in Ripple’s native ecosystem.
No matter how much overlap in usage, XRP is still functioning in ways that RLUSD cannot replace. Auto-bridging is part of such a function, which enables XRP to work as a liquidity bridge between various currency pairs within the XRPL.
XRP also boasts no issuing authority or counterparty, rendering it impervious to such restraints as account freezes or reversals of transactions. This functionality adds a layer of decentralization and security that stablecoins usually do not possess.
According to the most recent market update, XRP has traded at $2.30 this far, up by 30 percent in the preceding 30 days. The upward trend indicates that the market has faith in XRP’s relevance, which is coming at a time when RLUSD is increasingly being used.
