RLUSD VS XRP: Does XRP retain its use as a bridge currency?

The introduction of RLUSD, Ripple’s own Stablecoin, puts pressure on the position of XRP. Since the launch at the end of last year, RLUSD has not only been strongly integrated into Ripple Payments, but the coin is also growing remarkably quickly. With a market value of $ 294 million, the Stablecoin starts to conquer a permanent place within payment transactions.

This development raises questions: Can XRP retain its function in a system in which RLUSD is becoming increasingly prominent? The discussion about this broke out in the XRP community.

Two different visions

Wrathofkahneman, a well-known name within the XRP circles, sees that it is thought that is too black and white. According to him, XRP and RLUSD are not rivals, but complement each other. He points out that XRP continues to play a crucial role behind the scenes through autobridging. XRP uses this mechanism as an intermediate step for currency changes where there is no direct trade route, for example between the euro and RLUSD.

He states that this function XRP gives a lasting role as a liquidity engine within the ecosystem, even if users prefer RLUSD because of the price stability.

Keller questions practical utility autobridging

Daniel Keller, CTO of Eminence, responded nuanced but critically. Although he recognizes the technical elegance of autobridging, he sees the usefulness as limited in practice. According to him, most major trade volumes are aimed at currencies with existing direct couples, so that autobridging is hardly used.

Keller described a hypothetical scenario in which two exotic tokens are still connected via XRP without a direct trade relationship. A great idea, he recognizes, but rarely applies in real trade volumes. According to him, autobridging is more about potential than daily use.

Instead of focusing on rare mechanisms, Keller proposes to just embrace the power of RLUSD: a reliable, cheap and issued by Ripple. According to him, that simply offers the most efficient solution for most users.

RLUSD adds, but does not replace

Ripple itself continues to support XRP. CTO David Schwartz already indicated last year that XRP remains an indispensable link on the Ledger, including as a means of payment and as a bridge currency. Ripple president Monica Long also announced that XRP and RLUSD will function side by side within Ripple’s payment transactions.

Although it seems as if Rlusd takes over part of XRP’s old roll, there is a clear place for XRP within the wider picture. Not only due to technical functions such as autobridging, but also because Ripple is actively deploying in his infrastructure.

Whether this ratio will change in the future depends on adoption and market dynamics. But for the time being, XRP and RLUSD remain two sides of the same medal rather than each other’s replacements.