Ripple’s RLUSD Grew 88% This Year While XRP Fell 29%. Is the Stablecoin Replacing XRP?

Ripple announced that its stablecoin, Ripple USD (CRYPTO: RLUSD), has grown 88% in 2026, pushing its market cap to $2.6 billion. In contrast, XRP (CRYPTO: XRP) has declined about 31% during the same period. At the recent Swell conference in New York, Ripple showcased RLUSD to Wall Street, and the stablecoin has launched on Coinbase (NASDAQ: COIN | COIN Price Prediction) Prime, Coinbase Exchange, and the Coinbase retail app, utilizing the XRP Ledger, Base, and Ethereum networks.

Currently, XRP trades at $1.28, down 3.4% in the last 24 hours and about 14% over the past 30 days.

This timing raises concerns for XRP holders, who wonder whether RLUSD is quietly taking over XRP’s functions. Ripple CEO Brad Garlinghouse assured attendees at Swell that the company would not abandon XRP and emphasized that RLUSD supports it. However, RLUSD seems to be taking on roles that require a stable dollar, while XRP continues to serve as a bridge and fee asset.

Ripple Put RLUSD on Coinbase and Won a National Trust Bank Charter

RLUSD is a stablecoin designed to maintain a $1 value, backed by dollar reserves. It has traded consistently around $1.00, with its notable 88% growth driven by an increase in tokens in circulation. The Coinbase launch connects RLUSD to both institutional and everyday users, enabling hedge funds and asset managers to trade it while also giving retail users access through the app.

Moreover, Ripple claims that RLUSD supports on-chain repo markets. A repurchase agreement, or repo, is a short-term loan in which one party offers a Treasury bill as collateral and plans to repurchase it later, using RLUSD as the cash component.

On October 26, Ripple received final approval from the Office of the Comptroller of the Currency for Ripple National Trust Bank, which will manage RLUSD’s reserves, act as a custodian for holders, and offer digital asset custody services. However, it cannot accept insured deposits or make loans.

Additionally, RLUSD has received a Moody’s rating, which signals its safety and is crucial for many treasurers and funds that can invest only in rated assets.

Ripple generates revenue through payments, custody services, and businesses it acquired, including prime brokerage Hidden Road, stablecoin payments platform Rail, and treasury software firm GTreasury. While Ripple does not disclose its full financials (as it is a private entity), typical stablecoin operations involve earning interest on reserves held in cash and short-term Treasury securities. As a result, every newly issued RLUSD dollar contributes to Ripple’s reserves and potential earnings.

Ripple’s Coinbase and Repo Deals Do Not Name XRP

Notably, Ripple’s descriptions of its deals with Coinbase and its repo initiatives do not specifically mention XRP as a settlement asset. Instead, these transactions feature RLUSD, highlighting its role in meeting dollar demand across Ripple’s products. For banks seeking an on-chain dollar solution, RLUSD is the clear choice.

RLUSD and XRP serve different purposes: XRP acts as a bridge asset, allowing payments to move between currencies like the Mexican and Philippine pesos without requiring prior funding of accounts abroad.

Additionally, XRP serves as the fee currency for transactions on the XRP Ledger. While RLUSD transactions on that ledger do consume small amounts of XRP, RLUSD itself operates on Base and Ethereum without using XRP, suggesting that the Coinbase launch may not significantly benefit XRP.

RLUSD faces significant competition, ranking 41st by market cap and far behind major players like Tether’s USDT (CRYPTO: USDT) and USD Coin (CRYPTO: USDC), issued by Circle Internet Group. Notably, Coinbase helped launch USDC and shares in its reserve income, suggesting it may still favor its competing stablecoin despite distributing RLUSD.

At the Swell conference, Garlinghouse supported both tokens and said RLUSD could complement XRP. He acknowledged that for some payments, using fiat and RLUSD might make more sense than XRP. As the leader of a company that issues RLUSD and holds substantial XRP, he offers valuable insight for XRP holders.

Is RLUSD Taking Over XRP’s Role at Ripple?

In part, yes. RLUSD appears to be stepping in for XRP in stable-value functions, such as collateral, repo cash, and the dollar leg of settlements, while XRP continues to serve as a bridge and fee token.

With XRP down 31% this year, Ripple would make this switch. Unfortunately for XRP holders, the adjustment may not benefit them much, as XRP earns only minimal fee burns from RLUSD activity on its own ledger.

XRP’s performance reflects this downturn, with its current price sitting 3.8% below the 20-day average of $1.33, 8.6% under the 50-day average of $1.40, and right at its 200-day average of $1.28.

If RLUSD begins replacing XRP in payment corridors and settles transactions without XRP, it could reduce demand for XRP. Conversely, if RLUSD supply on the XRP Ledger outpaces that on Ethereum and Base, it may signal a different trend.

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