Key Takeaways
- Garlinghouse said RLUSD competes with other stablecoins, not XRP.
- XRP Ledger accounts require XRP reserves, while RLUSD requires a trust line.
- Ripple prioritizes XRP where it suits customers, using fiat or RLUSD otherwise.
Garlinghouse Places RLUSD Alongside XRP
Ripple CEO Brad Garlinghouse stated on X on Nov. 3 that RLUSD and XRP served complementary purposes, identifying other stablecoins as RLUSD’s competitors. He addressed the relationship in separate replies to users on X, who discussed liquidity and the assets’ different functions.
Garlinghouse outlined where RLUSD competes:
“RLUSD isn’t competing with XRP. It’s competing with other stablecoins. Use case matters, and I want those use cases running on the XRPL.”
His statement was in response to a post arguing that deeper liquidity on the XRP Ledger (XRPL) could make XRP easier to use over time, while describing the price impact without direct use as indirect. That post raised a broader question about adoption: whether XRP would become a specialized institutional asset with restricted liquidity or achieve widespread use.
How XRP Supports RLUSD Activity on the Ledger
For businesses settling dollar-denominated obligations, RLUSD offers a payment asset designed to maintain a dollar value through its reserve backing and redemption structure. Ripple identifies payments, remittances, and treasury flows among its intended uses. That focus allows a company to move a dollar balance onchain while keeping the amount it owes and pays expressed in the same currency.
Every RLUSD transfer on XRPL falls under the network’s XRP transaction fee requirements, which consume a small quantity of XRP. That amount is destroyed, with the required fee varying by transaction type and network load. This network charge is separate from the value being transferred, so sending RLUSD does not require converting the payment amount into XRP.
Beyond fees, XRP can connect token markets when exchanging through it offers a better rate than a direct trade. Evernorth chief business officer Sagar Shah described this liquidity-routing role alongside RLUSD in May, positioning the stablecoin as the dollar-denominated asset. The ledger’s exchange mechanism can combine direct trades with routes through XRP to obtain a better overall rate.
Customer Needs Shape Ripple’s Asset Choices
In a separate reply to another user on X, Garlinghouse endorsed RLUSD and XRP’s distinct roles:
“Complementary, not competitive.”
The post he replied to explained that accounts require XRP reserves, while holders opt into RLUSD through a trust line, an account setting for accepting an issued token. XRP itself can be held without establishing a trust line.
At Swell, Ripple’s annual conference, Garlinghouse had described a customer-focused approach to XRP adoption in remarks shared Oct. 28. He said Ripple would prioritize XRP where it suited customer needs while using fiat currencies or RLUSD for other transactions. He preferred XRP handling a small share of a customer’s activity over none.
Among institutional providers supporting both assets, BNY confirmed Oct. 27 that eligible clients could safeguard, hold, and transfer XRP and RLUSD through its custody platform. The bank incorporated that access within its existing governance and operational controls. Its expanded custody offering built on BNY’s role as the primary custodian of RLUSD reserves.
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