RLUSD is positioned to play a significant role in supporting dollar-denominated transactions on the XRP Ledger, but analysts argue that its reach is limited when it comes to facilitating every type of digital asset exchange within the network.
Functional differences between RLUSD and XRP highlighted
Crypto analyst ChartNerd drew attention to this issue following a discussion initiated by Nick, known as Crypto Crusader, who had described XRP as a key option for routing transactions between various fiat-backed stablecoins.
The debate underscores the different functions served by RLUSD and XRP as the digital asset ecosystem evolves and more traditional financial assets are represented onchain.
Although RLUSD offers a payment and trading option backed by the US dollar, supporters of XRP’s intermediary capabilities believe that a neutral asset will continue to play an essential role when transactions involve assets that do not share a common currency or direct liquidity pair.
A significant share of trades on the XRP Ledger involve the US dollar on at least one side, making RLUSD well-suited for those. In contrast, swaps such as tokenized US Treasuries for tokenized euro money market funds, or lending between assets with no dollar exposure, often require a neutral intermediary.
Evernorth’s Sagar Shah explains the need for a neutral intermediary
ChartNerd referenced a statement by Sagar Shah, Chief Business Officer at Evernorth, who explained why RLUSD cannot substitute for XRP in every trading scenario. Shah pointed out that while RLUSD addresses dollar-based needs, many trades take place between assets without direct connections to the US dollar.
For example, he identified swaps between tokenized US Treasuries and euro money market assets as transactions where RLUSD provides limited utility. Shah further noted lending arrangements and cross-asset exchanges that operate outside dollar-denominated systems.
In such cases, he described XRP as a neutral asset capable of bridging diverse assets, stating that its role is not made redundant simply by the introduction of more stablecoins.
This perspective frames XRP and RLUSD as complementary, with each serving a distinct segment of the market rather than acting as interchangeable tools.
Ongoing debate around future utility of XRP and stablecoins
Nick, also active in the discussion, claimed that as digital representations of more international currencies emerge, the demand for a neutral intermediary like XRP will increase. He acknowledged that, for now, most stablecoins are primarily US dollar-based, but anticipated a shift as new fiat-backed assets enter the market.
He argued that in a globally interconnected blockchain-based financial system, routing between diverse digital currencies would require solutions beyond individual stablecoins, keeping XRP’s bridging function relevant.
Even as stablecoin adoption grows, competition with alternative routing models will depend on execution costs, settlement speed, and market depth—factors that could challenge XRP’s positioning as the default intermediary.
However, others challenged this outlook. An X user known as Alew noted that growing liquidity among stablecoins may allow direct trading between them, reducing the need for an intermediary asset. According to Alew, sufficient liquidity and efficient trading could make stablecoin pairs or alternative assets like RLUSD viable as bridges, potentially diminishing XRP’s central role.
Alew contended that XRP’s adoption will depend on ongoing advantages in liquidity, execution, and settlement rather than its status as a neutral bridge alone. The broader debate continues over which assets will prove most effective as blockchain-based finance develops and market structures evolve.
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