Well-known XRPL dUNL validator Vet recently took to X to clarify the recent RLUSD burning events.
Notably, Vet first cited the $39,000,000 worth of RLUSD that has been burned on the XRP Ledger and subsequently minted on Ethereum.
This large-scale transfer has sparked speculation about the motives behind these actions, especially concerning the UK, SBI, and institutional liquidity support. Before delving into these questions, Vet provided an educational overview of stablecoin inventory transfers.
He noted that stablecoin issuers, such as Circle and Tether, frequently perform inventory transfers to manage the supply of their tokens across various blockchains.
These transfers are done to address shortages, meet heightened demand, and stabilize the value of the stablecoins. Essentially, this process ensures that the stablecoin can maintain its 1:1 peg with the US dollar, even as its usage grows across different platforms.
$39,000,000 in $RLUSD has been burned on the XRP Ledger and minted on Ethereum.
Many speculate on the reasons for it. Before we dive how the UK, SBI and Institutional liquidity is behind it, we need to get a tiny educational piece in for this.
Stablecoin issuers like Circle… pic.twitter.com/pvRESntJ5B
— Vet (@Vet_X0) April 24, 2025
Clarifying the RLUSD Burns
Vet strongly believes that the recent RLUSD burn on the XRP Ledger, followed by the minting of new tokens on Ethereum, is part of Ripple’s strategy to manage its inventory in response to market demand. This move aligns with the expanding presence of RLUSD on major Ethereum-based DeFi protocols.
The minted RLUSD tokens are then transferred to the B2C2 Group, a UK-based crypto liquidity provider acquired by SBI Holdings in 2020. B2C2 specializes in institutional liquidity and executes OTC trading and derivatives for clients, which helps Ripple maintain liquidity for RLUSD on Ethereum.
DeFi Use Cases Needed on the XRP Ledger
However, amid this clarification, further questions emerged. A community member expressed confusion over why RLUSD was issued on the XRP Ledger, then burned, and reissued on Ethereum.
However, Vet clarified that the rationale is to maintain inventory across supported chains to respond quickly to demand. By holding inventory on the XRP Ledger and Ethereum, Ripple can react to market fluctuations, burning on one chain and minting on the other as needed.
For example, if demand spikes on the XRP Ledger, they can issue more RLUSD there, and vice versa for Ethereum.
You want to hold a bit of inventory on all chains you support so that you can react quick to demand.
They hold inventory on the XRP Ledger because they have demand here too. It can go the opposite way as well, burn on ETH and issue on XRPL if spikes happen here.
— Vet (@Vet_X0) April 24, 2025
Another commenter pointed out that RLUSD would likely see more demand on the XRP Ledger if exchanges used the XRPL token. However, Vet explained that the real issue lies in the lack of decentralized finance (DeFi) use cases on the XRPL.
While XRP could logically benefit from DeFi applications, Ethereum has the most mature DeFi ecosystem, which drives much of the current demand for RLUSD on that chain.
RLUSD’s Integration into Ethereum
In parallel with these burns, RLUSD has made significant strides in its integration into Ethereum’s decentralized finance (DeFi) ecosystem.
On April 21, Aave, a major DeFi protocol, announced that users could now supply and borrow RLUSD on its V3 Ethereum core market. This is a step in enhancing the liquidity and usage of RLUSD within the Ethereum network.
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