Ripple's RLUSD Stablecoin Boosts XRP Burn Rate by 100%

Angelica Saldana, a prominent crypto enthusiast, recently shared her insights on the impact of RLUSD, Ripple’s newly announced stablecoin, on the XRP Ledger (XRPL).

Saldana explained that RLUSD contributes to the XRP ecosystem through transaction fees, liquidity improvements, and its function in cross-border payments. She highlighted that RLUSD transactions on the XRP Ledger require XRP to pay gas fees, which are burned. This mechanism reduces the total supply of XRP over time, introducing a deflationary aspect that could affect the asset’s long-term dynamics. Increased usage of RLUSD would lead to higher XRP burn rates, reinforcing the idea that the introduction of a stablecoin on XRPL has direct implications for XRP itself. By linking RLUSD’s activity to XRP supply reduction, Saldana suggested that the stablecoin’s adoption could influence XRP’s broader economic model.

Saldana also pointed out that RLUSD enhances liquidity for cross-border payments and decentralized finance (DeFi) applications on XRPL. By providing a stable digital asset within the ecosystem, RLUSD facilitates smoother transactions, particularly for businesses and financial institutions looking for price stability. This added liquidity strengthens the XRPL’s role in global payments by offering a reliable stablecoin alternative that complements XRP’s function as a bridge currency. She noted that when users convert RLUSD into other assets, XRP often serves as the intermediary, increasing demand for the cryptocurrency.

In a video featuring Ripple’s Chief Technology Officer, David Schwartz, he provided further insights into how RLUSD benefits the XRPL. Schwartz described the stablecoin as a tool for expanding use cases and opportunities for developers. While reaffirming XRP’s position as the native currency of the ledger, he explained that XRPL was designed to support multiple asset types, including stablecoins and fiat-backed tokens. Schwartz outlined how RLUSD enhances the XRPL decentralized exchange (DEX) by increasing trading volume. He explained that the DEX’s auto-bridging feature relies on XRP to facilitate trades between different assets, making XRP a key component in improving trading efficiency. He states that the addition of RLUSD to the ecosystem strengthens this mechanism by introducing another widely accepted asset.

Schwartz also highlighted that RLUSD and XRP serve different purposes within the ecosystem. While XRP remains a bridge currency for Ripple’s payment solutions, RLUSD supports the expansion of new blockchain-based financial applications. Schwartz mentioned that RLUSD’s introduction aligns with the growth of real-world asset tokenization, foreign exchange markets, and trade finance, areas expected to see increased adoption.

Saldana’s post emphasized the interdependence of RLUSD and XRP, describing the stablecoin as a factor that can increase both the usability and demand for XRP. Schwartz echoed this sentiment, noting that RLUSD’s presence on the XRP Ledger contributes to the broader adoption of on-chain applications. RLUSD’s role within the XRPL ecosystem may evolve as the stablecoin market expands. Its impact on liquidity, transaction efficiency, and asset conversion mechanisms highlights the stablecoin’s significance beyond its immediate function.