Ripple’s USD-pegged stablecoin, RLUSD, is gaining prominence as the San Francisco-based payments firm underscores its role in bridging the gap between decentralized finance (DeFi) and traditional finance (TradFi). In a recent blog post, Ripple highlighted RLUSD’s growing use case within its ecosystem, particularly emphasizing its role in the $1.25 billion acquisition of prime broker Hidden Road.
RLUSD as a Collateral Asset in Hidden Road Deal
Ripple’s acquisition of Hidden Road, a prime brokerage that clears over $3 trillion for 300 financial institutions annually, has spotlighted RLUSD as a key asset in the post-trade activities of the platform. Ripple disclosed that Hidden Road will use RLUSD as a collateral asset across its brokerage services, enabling cross-margining between digital assets and traditional markets.
Moreover, Hidden Road will migrate its post-trade operations to the XRP Ledger (XRPL), allowing it to leverage XRP for transaction fee settlements. Despite the strategic positioning of RLUSD, the announcement has stirred concerns among XRP holders regarding the diminishing role of XRP in Ripple’s evolving business model.
Community Questions XRP’s Role in the Deal
Ripple’s recent emphasis on RLUSD has prompted questions from the XRP community about the token’s relevance in the Hidden Road setup. Some community members argue that RLUSD is gradually replacing XRP as Ripple’s preferred asset, a sentiment echoed by XRP supporter Elena Schoen.
Also Read: Gemini Lists Ripple’s RLUSD Stablecoin as Adoption Surges Across 15 Exchanges
Schoen asserted that while RLUSD is gaining adoption as a multi-fiat on-chain stablecoin, XRP’s primary function appears limited to paying transaction fees on XRPL. In response, Ripple executives have reiterated that RLUSD and XRP serve distinct purposes, with CEO Brad Garlinghouse emphasizing that RLUSD facilitates price stability while XRP remains a vital bridge asset.
Ripple Execs Reaffirm XRP’s Utility
Despite community concerns, Ripple CTO David Schwartz maintained that RLUSD’s rise is not detrimental to XRP. He highlighted that RLUSD’s integration within the Hidden Road setup could actually bolster XRP’s liquidity by enabling broader access to cross-border settlement solutions. Schwartz emphasized that XRP’s core function as a liquidity bridge remains intact, positioning it as a key asset in Ripple’s broader financial ecosystem.
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