What Is the XRP Stablecoin RLUSD and How Does it Work?
I've been watching the stablecoin space for years, and while it's been dominated by the usual suspects like Tether and Circle, every so often a new player shows up claiming they can do it better. Ripple—the company that's been fighting the SEC while simultaneously trying to revolutionize cross-border payments—has now decided to throw its hat into the ring with Ripple USD (RLUSD), a dollar-backed stablecoin that's targeting institutions with promises of better compliance and transparency.
Given that the stablecoin market is sitting at around $262.6 billion and Ripple already has established relationships with banks and payment providers, this isn't just another crypto project launching a "me-too" token. They're betting that their regulatory experience and institutional focus can help them grab meaningful market share in a space that's proven surprisingly sticky for early movers.
I'm going to walk through what RLUSD is, how it works under the hood, what it means for XRP holders, and whether Ripple's latest venture has any real shot at making a dent in this increasingly crowded market.
What Is Ripple USD (RLUSD)?
Ripple USD (RLUSD) is a fiat-backed stablecoin designed to maintain a 1:1 value peg with the USD. It is issued by Standard Custody & Trust Company (SCTC), a wholly-owned and regulated subsidiary of Ripple that operates as a limited purpose trust company chartered by the New York Department of Financial Services (NYDFS).
The stability of RLUSD is maintained by holding reserves that are fully backed by an equivalent amount of US dollar deposits, short-term US government bonds, and other cash equivalents. To ensure transparency and build trust, Ripple publishes monthly attestations of these reserve assets, conducted by an independent, third-party accounting firm. This commitment to regulatory oversight and verifiable backing is a core part of RLUSD's design.
RLUSD is a multi-chain stablecoin, natively issued on both the XRP Ledger (XRPL) and the Ethereum network.
Why Did Ripple Launch RLUSD?
Ripple launched RLUSD to address the growing demand for a trusted, reliable, and compliant stablecoin, particularly for institutional and cross-border payment use cases. While the stablecoin market is large, it is heavily concentrated, creating a need for diversification and a new entrant focused on enterprise-grade solutions.
The primary use cases and value propositions for RLUSD include:
Enhancing cross-border payments: RLUSD will be integrated into Ripple's existing global payments network, which already serves hundreds of institutions in over 90 markets. The stablecoin will help streamline international transactions by providing a stable and efficient settlement asset.
Improving liquidity for institutions: For banks, payment providers, and other financial institutions, RLUSD offers a reliable on/off-ramp between traditional fiat systems and the crypto world. It simplifies treasury operations and provides a stable asset for settling trades.
Fueling DeFi on the XRP Ledger: The introduction of a native, trusted stablecoin is intended to unlock new opportunities within the XRPL's DeFi ecosystem. It provides a stable store of value and medium of exchange for decentralised applications built on the ledger.
Providing a compliant and transparent alternative: With its NYDFS-regulated charter and commitment to monthly reserve attestations, RLUSD is positioned as a highly transparent and compliant stablecoin, appealing to institutions that prioritise regulatory certainty.
RLUSD vs. Other Stablecoins
RLUSD enters a market with several established players. To understand its unique position, it's essential to compare it with the leading stablecoins across key metrics.
| Category | RLUSD (Ripple USD) | USDT (Tether) | USDC (USD Coin) | USDS (formerly DAI) |
|---|---|---|---|---|
| Type | Fiat-Backed | Fiat-Backed | Fiat-Backed | Crypto-Backed (Decentralised) |
| Pegged To | US Dollar (1:1) | US Dollar (1:1) | US Dollar (1:1) | US Dollar (1:1) |
| Issued By | Ripple (Standard Custody & Trust Company) | Tether Holdings Ltd. | Circle | Sky (formerly known as MakerDAO) |
| Centralisation | Centralised | Centralised | Centralised | Decentralised |
| Market Cap (as of July 1, 2025) | $455.2 million | $157.7 billion | $61.4 billion | $7.2 billion |
| 24-Hour Volume (as of July 1, 2025) | $64.8 million | $22.8 billion | $4.4 billion | $4.9 million |
| Rank (among all cryptocurrencies) | #165 | #3 | #7 | #21 |
XRP Ledger Ecosystem Benefits
The introduction of RLUSD is poised to bring significant benefits to the XRP Ledger ecosystem. As a native stablecoin, it addresses the need for a stable store of value and medium of exchange, a role that the volatile XRP asset is not designed to fill. This is expected to catalyse several key areas of growth.
First, RLUSD can improve liquidity on the XRPL's native decentralised exchange. By providing a reliable, USD-pegged asset, it creates more robust and stable trading pairs, attracting more traders and developers to the ecosystem. This enhanced liquidity can lead to tighter spreads and a better trading experience for all users.
Furthermore, RLUSD complements, rather than competes with, XRP. While RLUSD offers stability for settlements and DeFi applications, XRP remains the essential bridge asset for cross-currency transactions and is the only asset that can be used to pay transaction fees on the ledger. Increased activity driven by RLUSD will likely lead to more transactions on the XRPL, indirectly boosting the utility and demand for XRP.
The Future Ahead for RLUSD
The future outlook for RLUSD appears closely tied to Ripple's strategic focus on enterprise adoption and regulatory compliance. A key milestone will be the full integration of RLUSD into Ripple's multi-billion dollar payments network in early 2025, which could significantly scale its usage among hundreds of financial institutions worldwide.
As a regulated and transparent stablecoin, RLUSD is well-positioned to attract institutional capital, particularly from entities seeking to diversify away from the current market leaders or those requiring a higher standard of regulatory assurance. The appointment of high-profile figures like the former Governor of the Reserve Bank of India to its advisory board further signals its ambition to build trust at an institutional level.
In the DeFi and tokenised real-world assets (RWAs) sectors, RLUSD provides a foundational layer for building new financial products on the XRP Ledger. While it faces a long road to challenge the dominance of established players like USDT and USDC, its strong regulatory foundation, enterprise focus, and synergistic relationship with the XRPL could provide a unique and compelling path for future growth.
Frequently Asked Questions
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RLUSD is a separate, fiat-backed stablecoin and does not use XRP as collateral or backing. However, it is natively issued on the XRP Ledger, meaning it operates alongside XRP and enhances the XRPL ecosystem, but it is not backed by or interchangeable with XRP itself.
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1 RLUSD is always pegged to 1 US dollar. As of today, XRP is worth 3.48425 USD, so 1 RLUSD would be equivalent to approximately 0.2871 XRP. The exact amount will fluctuate as XRP's price changes. There is no fixed XRP-to-RLUSD rate.
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You can acquire and hold RLUSD, but as a stablecoin, its value is always intended to remain at 1 USD. It is not designed as an investment for price appreciation, but rather as a stable medium of exchange and store of value within the XRP Ledger, Ethereum, and for payments and DeFi activities.
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1 RLUSD is designed to always be worth 1 US dollar, maintaining a 1:1 peg to the USD through full backing by cash and cash equivalents.
Risk Disclosure
Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate. VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).
Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.