XRP Advocate Argues New Stablecoin Bolsters, Not Undermines, XRP’s Role
Jake Claver, a prominent proponent of XRP, contends that Ripple’s forthcoming RLUSD stablecoin will not diminish the case for XRP but could, in fact, strengthen it by introducing more institution-friendly dollar liquidity to the XRP Ledger.
In a recent X thread, Claver articulated that XRP and RLUSD are designed for distinct purposes. RLUSD is envisioned as a compliant digital dollar, while XRP serves as a neutral bridge asset, facilitating value transfer across otherwise disparate markets. This perspective addresses a persistent question within the XRP community: if RLUSD can move funds instantaneously, what is XRP’s continued necessity?
Claver posits that this framing overlooks the fundamental difference between a settlement asset and a routing asset. “RLUSD is not the finish line. It is the front door,” Claver wrote. “Institutions come for a compliant digital dollar. Once they are on the ledger they start asking bigger questions. Can we tokenize securities here? Settle trades instantly? Drop the 3 day wait.”
XRP as the Ledger’s “Money Changer”
To illustrate his point, Claver employed an analogy of a historical trading port. Merchants arrive with various commodities like silk, spices, wool, salt, and gold, but rarely possess precisely what another trader desires. A silk merchant seeking pepper might first need to exchange their silk for wool before acquiring the desired spice. Claver noted that with ten goods, this creates 45 potential trading pairs; with a hundred goods, the number escalates to nearly 5,000.
His conclusion is that markets require a neutral intermediary asset to reduce friction. On the XRP Ledger, Claver asserts, XRP fulfills this role. “On the surface that looks like one trade. Underneath it is two. He buys your silk and sells you silver, both at once. Remove that money changer and the whole port slows to a crawl. On the XRP Ledger, XRP plays that exact role,” he explained.
Claver provided an example of an individual swapping a tokenized Treasury bill for a euro stablecoin. In his model, the user might perceive a single transaction—one asset entering and another exiting. However, the underlying routing path can, and often does, involve XRP. “The trader never sees the XRP step. Asset goes in, the one they want comes out. XRP sits quietly in the middle making it work,” he stated.
Why RLUSD Does Not Replace XRP
Claver described RLUSD as a digital dollar engineered to maintain a stable value of one dollar, backed by tangible reserves held in a bank. This makes it advantageous when both parties in a transaction seek dollar exposure. However, he argued that numerous future use cases on the XRP Ledger may not conclude in dollars, including the exchange of tokenized Treasuries for euro funds, lending in non-dollar currencies, or other asset-to-asset transactions.
“RLUSD is perfect anytime both sides of a trade want dollars at the end. Plenty of trades do,” Claver wrote. “But plenty do not. Tokenized Treasuries swapping into euro funds. Lending in other currencies. Any trade where neither side is USD. There, a dollar coin cannot sit in the middle.”
He then outlined three limitations that, in his view, preclude RLUSD from becoming the ledger’s universal bridge asset. Firstly, RLUSD has an issuer, introducing issuer-specific risk. Should the entity behind it encounter legal, banking, or operational challenges, the stablecoin could be impacted. XRP, in contrast, is not minted by a single issuer and cannot be deactivated by one company, he argued.
Secondly, Claver contended that a global routing asset must be neutral. Regulated stablecoins are compelled to adhere to sanctions, blacklists, and regional regulations, potentially allowing them to freeze tokens or block specific users. While this may be suitable for a regulated dollar product, Claver suggested it is less appropriate for a foundational bridge asset.
Thirdly, liquidity pools necessitate two distinct assets. RLUSD can be paired with euro stablecoins, tokenized Treasuries, or other instruments, but it cannot simultaneously represent both sides of a market. Claver concluded that the asset most likely to emerge as the primary routing layer is one that is liquid, neutral, free from issuer risk, and has a proven track record. His assertion is that XRP fits this description.
At press time, XRP was trading at $1.2628.
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