Will RLUSD Sideline XRP? Expert Explains How XRP’s Role Will Be Amplified

The launch of Ripple’s RLUSD stablecoin has sparked a flurry of speculation about the future role of XRP on the XRP Ledger (XRPL). Some observers have questioned whether the fiat-pegged asset could reduce XRP’s relevance within the ecosystem. However, according to a post by the respected All Things XRP community on X, these concerns overlook a critical reality: RLUSD isn’t a replacement for XRP—it’s a strategic extension of its utility. RLUSD may end up amplifying XRP’s significance across institutional and cross-border use cases rather than diminishing it. XRP’s Native Advantage on the XRPL To understand why XRP’s role is set to grow stronger, it’s essential to revisit its unique architecture within the XRPL. XRP is not just another asset on the ledger—it is the default bridge currency for transaction routing. The XRPL’s pathfinding algorithm is designed to identify the most efficient routes for payments, and XRP is almost always the optimal choice due to its liquidity, speed, and low transaction costs. This makes XRP indispensable in multi-hop payments, where it facilitates seamless asset conversion across borders or currencies. SOME FEAR RLUSD WILL SIDELINE XRP. Here’s the truth: XRP’s role is about to be amplified, not diminished. Why? Liquidity preference. On the XRPL, pathfinding algorithms default to XRP for transaction routing. It’s the native bridge asset—faster, cheaper, and more deeply… — All Things XRP (@XRP_investing) May 22, 2025 Unlike stablecoins or external tokens, XRP is deeply embedded into the ledger’s core infrastructure. Its low transaction fee—typically less than a fraction of a cent—not only makes it economically viable for micropayments and retail transactions but also ensures cost-efficiency in high-volume treasury operations. No other asset currently matches XRP in its combination of settlement speed, decentralization, and cost efficiency. RLUSD: Enhancing Stability, Not Replacing Function RLUSD enters the ecosystem with a clearly defined purpose: price stability. As a Ripple-issued stablecoin, RLUSD is pegged 1:1 to the U.S. dollar and is expected to play a critical role in institutional settlement, treasury operations, and possibly tokenized asset trading. However, RLUSD’s introduction doesn’t challenge XRP’s core function as a liquidity bridge—it complements it. According to All Things XRP, RLUSD should be seen as a layer that broadens XRPL’s institutional appeal. Institutions seeking price-stable assets for accounting and risk management will find RLUSD valuable, particularly in on-ledger use cases that require minimal volatility. However, when it comes to the actual movement of value, especially across borders, XRP still holds the key. The synergy between RLUSD and XRP is where the strength of Ripple’s strategy lies. As more institutions board to use RLUSD for settlements, they will inevitably interact with XRP, especially when liquidity routing or foreign exchange comes into play. This increased activity feeds directly into XRP demand, boosting its liquidity across corridors. Pathfinding Dominance and On-Demand Liquidity One of the most understated aspects of XRP’s utility is its dominance in pathfinding. The XRPL’s pathfinding algorithm scans all possible routes for converting one asset into another and defaults to XRP when it offers the most efficient path, which it often does. This positions XRP as a central hub in a vast network of global liquidity, making it indispensable to On-Demand Liquidity (ODL), Ripple’s flagship cross-border payments solution. As RLUSD is integrated into ODL workflows , it will often need to convert into or out of XRP for final settlement, especially across jurisdictions where RLUSD isn’t yet adopted. XRP’s speed and sub-cent fees mean that it remains the preferred conduit for converting stablecoins and fiat currencies in real-time. We are on twitter, follow us to connect with us :- @TimesTabloid1 — TimesTabloid (@TimesTabloid1) July 15, 2023 The Liquidity Feedback Loop Perhaps the most compelling reason XRP’s role will expand is due to what analysts term the “liquidity feedback loop.” As RLUSD adoption grows, so does transactional volume on the XRPL. This activity not only increases the number of conversions routed through XRP but also attracts more market makers, more liquidity providers, and more on-ramps and off-ramps. In turn, this tightens spreads, deepens order books, and makes XRP an even more efficient bridge asset. Every new stablecoin user is a potential contributor to XRP’s liquidity pool. And in decentralized systems, liquidity begets more liquidity. Rather than pushing XRP aside, RLUSD accelerates this virtuous cycle, reinforcing XRP’s foundational role. Betting Against the Ledger’s Design? The architecture of the XRPL was never built to promote one asset at the expense of another. Instead, it’s designed for synergy and optimization. Betting against XRP, as All Things XRP notes, is effectively betting against the pathfinding logic and liquidity design of the ledger itself. The ledger prefers XRP not because it’s Ripple’s native token, but because it works consistently, reliably, and economically. In a digital economy where speed, trust minimization, and cost-efficiency are paramount, XRP remains unmatched. RLUSD, while a valuable addition, is merely an expansion of the ledger’s capabilities, not a threat to its core. Far from sidelining XRP, RLUSD appears poised to reinforce its relevance in the rapidly evolving landscape of blockchain-based finance. XRP’s native integration, pathfinding dominance, and ultra-low transaction costs make it indispensable for the ledger’s liquidity architecture. Meanwhile, RLUSD brings a new layer of price stability and institutional appeal. Together, they form a synergistic pair—one that strengthens the XRPL’s position as a premier decentralized finance infrastructure for global value transfer. As the ecosystem matures, the XRP-RLUSD dynamic could become a model for how native tokens and stablecoins can co-exist and complement each other, amplifying utility, not competing for dominance. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. 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