RLUSD is the Trojan Horse That Could Break XRP: Pundit

An XRP community member who goes by “Stellar Expert” recently claimed that the Ripple stablecoin, RLUSD, could threaten XRP’s future rather than support it. 

In a thread on X, he suggested that RLUSD might shift Ripple’s focus away from XRP and possibly render the asset unnecessary. However, Ripple leaders have in the past pushed back against this idea, confirming the two assets play different but equally important roles.

Despite the reassurance, Stellar Expert recently argued that RLUSD’s multi-chain design could weaken the XRP Ledger’s position. He pointed out that RLUSD resides on both Ethereum and the XRP Ledger.

Concerns RLUSD Might Thrive Beyond the XRP Ledger

As a result, he questioned whether the stablecoin might end up thriving more on other blockchains like Ethereum or Solana, especially if institutional clients choose these options for their better infrastructure.

He compared this possibility to how USDT started on Bitcoin’s Omni layer but later found a stronger foothold on TRON, which offered lower fees and faster speeds. However, this argument might not hold with XRPL, which is already fast and cost-effective.

According to him, if RLUSD gains traction outside the XRP Ledger, XRP could lose most of its reason to exist. He claimed that RLUSD could handle the same tasks XRP exists for, such as cross-border payments, currency exchange, and settlement. 

3. What If RLUSD Finds Its Home Outside XRPL?
Ripple says RLUSD will live on multiple chains.
But DeFi is on Ethereum.
Speed is on Solana or even Tron.
Liquidity moves to where trading demand is.
If RLUSD succeeds outside XRP Ledger… what’s left for XRP?

— Stellar Expert (@StellarExpert) June 3, 2025

Since RLUSD is programmable, stable, and works across chains, he said it could become the core token used by banks and other institutions in Ripple’s network. In his view, this development could leave XRP with little real purpose.

Speaking further, he also warned XRP supporters not to assume that everything Ripple builds will benefit XRP. While Ripple continues to roll out tools and services, he believes the company is now pouring its real efforts into RLUSD. 

According to him, if that stablecoin succeeds without XRP, then XRP may slowly fade into the background, much like how Omni lost relevance when Tether moved on.

Ripple Executives Have Cleared the Air

Nonetheless, Ripple executives had already addressed these concerns. Last October, Ripple President Monica Long clarified that RLUSD and XRP are not in competition. She explained that the company uses both assets for its payment service and that they work side by side depending on what clients require.

Ripple CTO David Schwartz also made similar statements last year. He emphasized that XRP still plays a unique role on the XRP Ledger. Besides serving as a bridge asset in payments, it also supports the network by powering transactions amid other native functionalities.

Schwartz explained that some payment clients prefer XRP for its liquidity and speed, while others may choose a stablecoin depending on the use case or regulatory demands. Either way, Ripple uses both assets actively based on client needs.

In addition, Stellar Expert’s idea that Ethereum offers better performance might not reflect the actual reality. Notably, the XRP Ledger already delivers faster and cheaper transactions than Ethereum. 

While Ethereum remains the hub of decentralized finance, it comes with high gas fees and slower processing times. TRON attracted USDT because of faster and cheaper transactions, something the XRP Ledger already has as an edge over Ethereum.

Right now, RLUSD mainly operates on the XRP Ledger. Because the network uses XRP for transaction fees, any increase in RLUSD activity actually boosts XRP’s utility. More transactions mean more XRP gets burned as part of the fee system, which could help strengthen the asset over time, not weaken it.