Bitcoin investor and entrepreneur Lark Davis stated that the introduction of RLUSD, Ripple‘s dollar-backed stablecoin, is not expected to create significant institutional demand for XRP. In a recent post on X, Davis argued that financial institutions can leverage RLUSD across multiple blockchains while holding only minimal amounts of XRP to process high-volume transactions.
Ripple launches RLUSD amid XRP speculation
Ripple, a San Francisco-based payments technology company, has clarified that RLUSD was not developed to replace XRP within its ecosystem. Brad Garlinghouse, CEO of Ripple, emphasized that RLUSD is designed to compete with other stablecoins rather than with XRP itself. The company has maintained that each of its products fulfills a distinct function for the network.
Lark Davis echoed this position by referencing Garlinghouse’s recent remarks, noting that stablecoins such as RLUSD serve one market segment, while XRP continues to function as a bridge asset for liquidity. Davis stated that the success of RLUSD does not compel institutions to accumulate significant amounts of XRP, as RLUSD can settle transactions across supported blockchains, including Ethereum, with only a nominal XRP holding.
Ripple CEO Brad Garlinghouse maintained that RLUSD directly competes with existing stablecoins and not with XRP, emphasizing that the stablecoin supports Ripple’s broader infrastructure rather than overlapping with XRP’s intended use.
Davis provided an example, explaining that institutions could hold as little as $50 worth of XRP and still conduct thousands of transactions at scale, given RLUSD’s cross-blockchain operability.
Mini dictionary: RLUSD, Ripple’s stablecoin pegged to the US dollar, is designed for use across various blockchains, enabling seamless settlements without exposure to crypto price volatility.
XRP utility and its evolving role
Davis recalled that the original vision for XRP provided a compelling solution for cross-border payments, allowing currency to be rapidly converted, moved globally, and cashed out in local currencies. He noted that XRP was conceived to address the slow and expensive nature of traditional payment networks, a mission still pursued within Ripple’s technology framework.
However, Davis observed that the widespread adoption of stablecoins has increasingly covered the market needs XRP was meant to fulfill. He argued that stablecoins, including RLUSD, now facilitate payments, trading, and institutional settlements, offering predictable value and eliminating exchange rate risk.
Community debate: Replacement or coexistence?
Despite Davis’s skepticism, some XRP supporters maintain that the cryptocurrency retains a meaningful role within Ripple’s expanding network. They suggest that RLUSD’s adoption might even strengthen XRP indirectly, as certain payment flows within Ripple’s infrastructure still require XRP as a liquidity bridge.
Brad Garlinghouse has affirmed that XRP remains at the center of Ripple’s operations. He also stated that further use of RLUSD could boost broader liquidity within Ripple’s ledger without displacing XRP. The ultimate balance between stablecoins and XRP may depend on how the company’s ecosystem develops in response to market demand.
Lark Davis explained that the increasing dominance of stablecoins like RLUSD allows institutions to settle global transactions quickly and with fewer risks, limiting the necessity for direct XRP exposure in many payment scenarios.
