Recently, a claim circulating on social media suggested that Ripple's launch of RLUSD would limit the utility of XRP. Crypto commentator All Things XRP has refuted this myth.
Function of RLUSD and Its Relationship With XRP
In a recent tweet, All Things XRP emphasizes that RLUSD and XRP are not competitors. RLUSD was created to enhance the properties of XRP, such as liquidity and transaction speed. RLUSD provides price stability, which is key for institutional clients wary of dealing with more volatile digital assets. Meanwhile, XRP continues to function as a bridge asset, enabling rapid movement of value across borders. Together, these two assets further Ripple's goals for faster, cheaper payment solutions.
Supporting XRP on the XRP Ledger
All Things XRP also highlights the foundational role of XRP in the operation of RLUSD. All transactions involving RLUSD are executed on the XRP Ledger, implying that transaction fees are paid in XRP. This also contributes to XRP's deflationary model, as small amounts of XRP are 'burned' during RLUSD transactions. Therefore, increased use of RLUSD positively affects demand for XRP, strengthening its value.
Institutional Access Without Volatility
One reason for the introduction of RLUSD is to lower the volatility barrier for institutional clients. RLUSD provides a stable entry point for financial institutions seeking to participate in Ripple's ecosystem without directly engaging with volatile assets. Ripple is utilizing various types of assets, including fiat, stablecoins, and XRP, which confirms XRP's continuing importance in global payments.
The economic statistics of RLUSD, including a market cap of $300 million and over 35 million transactions, support its positive impact on the XRP ecosystem. Thus, as the commentator asserts, XRP remains at the center of Ripple's technologies despite emerging myths.
