Most crypto investors associate Ripple with XRP (XRPUSD), a widely followed cryptocurrency. However, with the Securities and Exchange Commission warming up to crypto and President Donald Trump pushing for reduced restrictions on digital assets, Ripple received approval to launch its own stablecoin, known as Ripple USD (RLUSD) in December 2024.

Ripple first announced plans for RLUSD in April 2024, began beta testing in August 2024, and received final regulatory approval from the New York Department of Financial Services (NYDFS) on Dec. 10, 2024. 

Ripple USD was issued on the XRP Ledger (XRPL), which is Ripple’s own blockchain and lets users transact with RLUSD with minimal fees and fast speeds. It is also available on the Ethereum (ETHUSD) blockchain. 

What Makes RLUSD Unique

Ripple announced on Aug. 7 that it will be acquiring a stablecoin technology company called Rail for $200 million. Rail’s technology is precisely what Ripple needs for its target market of international business-to-business (B2B) payments. Rail claims to handle over 10% of global B2B stablecoin transactions.

In April, Ripple announced a $1.25 billion purchase of multi-asset prime brokerage Hidden Road to boost RLUSD’s clearing and financing. It also selected BNY to custody its RLUSD reserves.

This makes RLUSD the only stablecoin that is actively pursuing institutions and banks instead of primarily targeting retail users. The current tech already makes it one of the fastest and cheapest ways to transact. Choosing BNY also makes the safety on par with Circle’s (CRCL) USD Coin (USDC), which also uses the same bank as its custodian.

If you believe that crypto is poised to go mainstream soon, RLUSD can become much bigger than USDC due to its focus on institutions.

Expanding Tech Attracts Retail

RLUSD has integrated Chainlink’s (LINKUSD) pricing standard for verifiable data on Ethereum. And MetaComp’s StableX’s pairing with RLUSD already allows cross-border payments in over 31 currencies.

Despite its focus on institutions, retail users are now increasingly switching over to RLUSD, with volume equal to 29% of RLUSD’s market capitalization. This is slightly higher than USDC’s 26% as of this writing.

The biggest challenge will be convincing investors that RLUSD is superior to USDC. It won’t happen overnight, but Ripple’s moves to acquire key stablecoin companies and their technology, as well as its focus on attracting institutional users, will help. 

Consider Going for RLUSD If You Hold XRP

RLUSD is natively issued on Ripple’s own blockchain, so this native pairing means XRP holders can use RLUSD directly alongside XRP. This is great if you constantly trade XRP.

The biggest drawback at the moment is that RLUSD is a relatively new project compared to USDC. The latter has massive liquidity, but RLUSD is growing fast. The market capitalization has grown from $53 million in March to $666.6 million today.

I expect Ripple to keep improving its stablecoin technlogy to make RLUSD even more appealing for banks and institutions. Ripple’s push for a national banking charter, if granted, could make it the first stablecoin with dual state and federal oversight. Ripple says this would create a new “benchmark of trust in the stablecoin market.”