Stablecoin Paradox: Why Ripple's $789 Million RLUSD Success Is a Major Win for Ethereum, Not XRP

Ripple's RLUSD stablecoin has achieved spectacular growth in 2025, surging to a market capitalization of nearly $789 million and attracting major institutional partners. However, beneath this success story lies a profound paradox: over 88% of RLUSD's supply resides on the Ethereum blockchain, not Ripple's native XRP Ledger (XRPL). This reality is sparking disillusionment among XRP holders who expected the stablecoin's success to boost the utility and demand for the XRP token itself.

🌉 Ethereum Dominance vs. The XRPL Narrative

Launched in late 2024 to support cross-border payments, DeFi, and tokenization, RLUSD has secured high-profile partnerships with major financial entities like DBS and Franklin Templeton. Despite Ripple framing the XRPL as the core infrastructure for its digital assets, the data paints a different picture: Ethereum's Share: More than $700 million (approximately 88% of the total supply) of RLUSD is minted and circulating on Ethereum.XRPL's Limited Role: Less than $90 million of the stablecoin's supply is active on the XRPL.New Issuances: New RLUSD issuances since early 2025 have been almost exclusively launched on Ethereum, indicating a strategic prioritization of that ecosystem's massive DeFi liquidity.

🛑 The Disconnect: Why RLUSD Does Not Boost XRP

The heavy tilt toward Ethereum is creating a major point of contention for the XRP community, which long held the thesis that the adoption of Ripple's stablecoin would necessitate more transactions on the XRPL, thereby increasing the burn rate and utility of the XRP token (since XRPL transaction fees require XRP). Zero Impact on XRP Utility: On Ethereum, XRP plays no role in RLUSD transactions. As pointed out by analysts, RLUSD largely displaces the need for XRP in cross-border transactions, and its growth has a minuscule effect on the XRP burn rate.Disillusionment: For XRP holders who anticipated utility gains from Ripple's flagship product, the fact that over 80% of the value is accruing to a rival chain (Ethereum) sparks a debate about the "point of Ripple" for its native token holders.Competitive Landscape: While RLUSD is one of the fastest-growing stablecoins, its competition remains fierce, trailing rivals like PayPal's PYUSD and BlackRock's BUIDL in overall market capitalization.

📌 Conclusion: Ethereum is the Real Stablecoin Winner

The phenomenal growth of RLUSD undeniably validates Ripple's ability to attract institutional adoption in the stablecoin market. However, by choosing to leverage Ethereum's vast liquidity and decentralized finance ecosystem, Ethereum emerges as the clear winner in this stablecoin saga. The growth of RLUSD largely supports the Ethereum network and its ecosystem, resulting in minimal direct utility or demand boost for the native XRP token. This strategic choice highlights the ongoing dilemma for layer-1 blockchains like the XRPL when competing with the superior network effects of industry giants like Ethereum.

🔐 Disclaimer

This article summarizes financial news and analysis and is for informational purposes only. It does not constitute financial advice. The cryptocurrency market is highly volatile, and investments in specific tokens like XRP carry a significant risk of loss. The RLUSD stablecoin's performance is tied to its issuer's operations and market demand, not necessarily the value of the XRP token. You must always conduct your own research (DYOR) and consult with a professional financial advisor before making any investment decisions.