Experts discuss how RLUSD, Ripple's stablecoin, complements XRP by providing stability and compliance in finance.
Different Functionalities of XRP and RLUSD
XRP is used for fast, low-cost international payments but remains a volatile asset, limiting its use in scenarios requiring price certainty. Conversely, RLUSD is pegged to the dollar and supported by real cash reserves, ensuring the needed stability. All Things XRP emphasized that "Enterprises hate volatility. They need certainty, compliance, and redeemability."
Regulation and Compliance Factors
RLUSD is approved by the New York Department of Financial Services, providing an edge in institutional adoption. It supports strict KYC and AML regulations, which are vital in large-scale finance. While XRP gained legal clarity after the SEC's ruling, All Things XRP pointed out that this does not equate to regulated infrastructure like RLUSD's.
Why XRP Cannot Do It All
Some believe that XRP can perform all roles within Ripple’s network. However, the expert stated: "You can't use a volatile token to collateralize loans or remit salaries." Even minor price swings could compromise critical financial transactions. RLUSD is designed to address those limitations by offering price stability alongside compliance.
Thus, RLUSD and XRP do not compete but complement each other within Ripple's ecosystem, providing a blend of speed, liquidity, stability, and regulatory assurance.
