Hussain Zangana, aka Vet, an XRP Ledger validator, has explained why XRP differs from stablecoins such as Ripple USD (RLUSD). He argued that while holding RLUSD is optional, XRP is necessary to use the XRP Ledger.
In an X post, Vet explained the differences between the two assets, including their roles, issuers, and level of control.
“RLUSD is optional. XRP isn’t,” he stated.
XRP Is Needed to Use the XRPL
According to Vet, XRP plays a central role on the XRP Ledger because every account must hold a minimum amount of XRP to remain active. The network also charges transaction fees in XRP, meaning users need the asset to carry out transactions.
RLUSD works differently. Since Ripple issues the dollar-backed stablecoin, users must first set up a trust line before they can hold or transact with it on the XRPL.
Vet also pointed to differences in how the two assets are controlled. Ripple issues RLUSD and must follow U.S. regulations. This means the company can freeze RLUSD tokens when required.
XRP, on the other hand, has no central issuer that can freeze users’ holdings. Vet described it as a neutral asset with no single jurisdiction controlling it and classified it as a commodity.
XRP Has a Special Role in XRPL’s DEX
Vet also explained that XRP plays a unique role in the XRP Ledger’s decentralized exchange (DEX), particularly when users swap different currencies. The DEX automatically checks whether using XRP as an intermediary can offer a better exchange rate.
For example, when someone swaps USD for EUR, the system checks whether routing the trade through XRP would give them a better deal.
According to Vet, XRP is the only asset that receives this automatic treatment by default. This also makes XRP useful to market makers who provide liquidity across different trading pairs. They can use XRP to connect different markets without depending on a particular stablecoin issuer.
Vet added that market makers mainly need to consider XRP’s market price rather than worry about the financial risks of a token issuer.
RLUSD and XRP Have Different Uses
Vet also explained that XRP and RLUSD serve different purposes because their prices behave differently. RLUSD maintains a $1 value, making it useful for payments, payroll, invoices, and business transactions where price stability matters.
XRP, however, has a floating market price that changes with supply and demand. It is not backed by dollar reserves or tied to a fixed value.
This makes XRP more suitable for trading and investment, while its structure also allows users to transact without relying on a central issuer.
His comments suggest that XRP and RLUSD are not competing for the same purpose. Instead, they serve different needs within the XRPL ecosystem.
RLUSD Growth Could Also Benefit XRP
Meanwhile, Vet argued that the XRP Ledger does not need users to choose between XRP and stablecoins for the network to grow. More stablecoin transactions and activity involving other assets increase XRPL usage while XRP continues to serve as its native asset and liquidity bridge.
He believes that as the network becomes more successful, XRP could also gain wider acceptance.
In this setup, RLUSD provides payment price stability, while XRP handles transaction fees, account reserves, and liquidity transfers. Both assets can therefore benefit from increased activity on the XRP Ledger without serving the same purpose.