Angelica Saldana, a prominent crypto advocate, weighed in on the effects of Ripple’s new stablecoin, RLUSD, on the XRP Ledger (XRPL). In her X post, she explained how RLUSD contributes to the XRPL ecosystem by reducing transaction fees, improving liquidity for cross-border payments and DeFi, and acting as a bridge currency. 🤯
Saldana’s comments are accompanied by a video featuring Ripple CTO David Schwartz, who provides further insights into how RLUSD benefits XRP.
The following explains why RLUSD helps XRP:
* **RLUSD Transactions Reduce XRP Supply**: As RLUSD transactions require XRP for gas fees, these fees are burned in the process. This mechanism leads to a gradual decrease in the total supply of XRP over time, known as deflationary pressure. Higher usage of RLUSD will also increase this burn rate.
* **Increased Liquidity for XRPL**: RLUSD enhances liquidity on the XRPL for both cross-border payments and DeFi applications. By providing a stable digital asset within the ecosystem, it facilitates smoother transactions, particularly for businesses and financial institutions looking for price stability.
**From XRP’s Bridge to RLUSD’s Expansion:**
David Schwartz clarifies how RLUSD expands the possibilities on the XRPL:
* **DEX Functionality**: RLUSD enhances the decentralized exchange (DEX) by increasing trading volume. The auto-bridging feature of this DEX relies on XRP for trades between various assets, which underscores XRP’s role in improving trading efficiency. Adding RLUSD to the ecosystem strengthens this mechanism.
* **Global Payments and New Applications**: Schwartz emphasizes that both XRP and RLUSD have distinct roles within the XRPL ecosystem. While XRP remains a bridge currency for Ripple’s payment solutions, RLUSD facilitates expansion of new financial applications based on blockchain technology. This includes areas such as real-world asset tokenization, foreign exchange, and trade finance.
* **Future Potential**: Saldana’s post highlights the interconnectedness of RLUSD and XRP, suggesting that the stablecoin can increase both the utility and demand for XRP. This sentiment is echoed by Schwartz, emphasizing that the presence of RLUSD on the XRPL contributes to the broader adoption of on-chain applications.
**The Stablecoin’s Evolution**: As the stablecoin market continues to grow, the impact of RLUSD will likely evolve. Its influence on liquidity, transaction efficiency, and asset conversion mechanisms further underscores its significance beyond its immediate functions.
Disclaimer: This content is intended for informational purposes only and does not constitute financial advice.