What is Ripple's RLUSD Stablecoin?

Ripple USD (RLUSD) is a stablecoin backed 1:1 by the US dollar, issued under the oversight of the New York Department of Financial Services (NYDFS). It exists on both the XRP Ledger (XRPL) and Ethereum, making it usable in Ripple’s payments network while also connecting to Ethereum’s DeFi ecosystem.

Every RLUSD token is fully collateralized by cash and short-term U.S. Treasuries, with reserves held by a licensed custodian. Transactions on XRPL settle in seconds with minimal fees, while Ethereum compatibility allows RLUSD to integrate with existing smart contracts and lending platforms.

Since its December 2024 regulatory approval and launch, RLUSD has reached $130 million in circulation, with listings on exchanges like Bitstamp, Uphold, and Bitso. Ripple has begun using RLUSD for cross-border settlements, setting it up as a stable alternative to XRP in institutional finance.

How Does RLUSD Stablecoin Work?

RLUSD operates through a mint-and-burn mechanism, where new tokens are issued only when an equivalent amount of U.S. dollars is deposited. Additionally, tokens are removed from circulation when redeemed for fiat, maintaining a 1:1 peg to the U.S. dollar at all times.

Here’s how RLUSD functions step by step:

• Minting: Authorized institutions deposit U.S. dollars with Ripple’s custodian, which mints an equivalent amount of RLUSD on the chosen blockchain.
• Token Issuance: RLUSD is created natively on XRP Ledger or Ethereum, allowing users to transact on both networks without intermediaries.
• Transactions & Transfers: On the XRP Ledger, RLUSD transactions settle in 3-5 seconds with minimal fees, while on Ethereum, RLUSD follows standard ERC-20 token mechanics.
• Peg Stability: RLUSD holds its value through arbitrage opportunities; if the price deviates from $1, traders buy or sell RLUSD until equilibrium is restored.
• Burning Mechanism: When users redeem RLUSD for fiat, the tokens are permanently destroyed to prevent oversupply.
• Blockchain Interoperability: RLUSD can move between XRP Ledger and Ethereum, either through Ripple’s managed swaps or third-party crypto bridges.

Regulatory Stance and Compliance

From the outset, Ripple positioned RLUSD within a strict regulatory framework, securing approval under a NYDFS trust charter. Issued through Standard Custody & Trust Co., LLC, it adheres to reserve backing, redemption rights, and compliance with NYDFS stablecoin standards.

Transparency is central to its design, with monthly third-party attestations verifying full backing by segregated cash reserves. An advisory board of former regulators and financial executives provides oversight, ensuring RLUSD aligns with institutional compliance expectations.

Globally, RLUSD operates within Ripple’s existing regulatory footprint, allowing for expansion into compliant jurisdictions. While currently unavailable in the European Union due to MiCA regulations, Ripple plans to pursue approval, maintaining a regulation-first approach.

Use Cases of RLUSD

RLUSD can be used in institutional payments, foreign exchange, and digital asset markets, providing a stable digital dollar. Ripple USD's whitepaper outlines its role in financial transactions, trading, and liquidity management across both traditional and crypto systems, including:

• B2B Cross-Border Payments: Ripple Payments integrates RLUSD to enable instant settlements across 90+ payout markets, offering an alternative to slow, expensive bank transfers.
• Foreign Exchange (FX) Markets: RLUSD facilitates on-chain FX trading with atomic settlement, reducing currency conversion costs and eliminating intermediaries.
• Trade Settlement for Banks & Funds: Institutions use RLUSD for real-time settlement of large transactions, improving capital efficiency and reducing counterparty risk.
• Real-World Asset (RWA) Tokenization: RLUSD serves as a stable settlement layer for RWA tokenization of government bonds, real estate, and commodities.
• On and Off-Ramps for Digital Assets: RLUSD streamlines the transition between fiat and crypto, making it easier for exchanges, fintechs, and payment providers to onboard users.
• Institutional Liquidity Management: Market makers and financial institutions use RLUSD for liquidity provisioning and treasury operations, reducing reliance on volatile crypto assets.

Since its launch, RLUSD has been listed on major exchanges like Bitstamp, Uphold, and Bitso and integrated into Ripple Payments for institutional use.

What is the Relationship Between RLUSD and XRP?

Both the RLUSD and XRP tokens run on the XRP Ledger, but they serve different financial functions. RLUSD is a stable, dollar-pegged asset for payments, while XRP is a decentralized currency used for liquidity and cross-border settlements.

XRP acts as a bridge asset, converting between currencies without the need for pre-funded accounts. RLUSD provides a fixed-value alternative for transactions that require price stability. Every RLUSD transfer on the XRP Ledger incurs a small XRP fee, keeping XRP embedded in network activity.

Ripple integrates both assets into its payment and liquidity products, letting institutions use XRP for fast conversions and RLUSD for stable settlements. This transforms the XRP Ledger into a multi-asset financial platform, with the potential to expand into more stablecoins for EUR, GBP, JPY, and others.

Ripple USD vs Other Stablecoins

RLUSD enters a $224 billion stablecoin market, but its institutional focus gives it a unique edge. While USDT dominates offshore exchanges and USDC powers DeFi, RLUSD is built for enterprise payments and cross-border settlements, leveraging Ripple’s financial network.

Like USDC, RLUSD is backed by segregated cash and short-term Treasuries, avoiding USDT’s exposure to corporate debt and secured loans. Unlike Ethena's USDe, which relies on synthetic yield, RLUSD is fully fiat-backed under a regulated trust, ensuring stability without derivative risk.

Liquidity is RLUSD’s main challenge, with USDT at $142 billion and USDC at $56 billion leading the market. However, its integration into Ripple’s payment rails provides a direct adoption path, positioning it for institutional finance rather than speculative trading.

How to Buy RLUSD

RLUSD can be acquired through certain crypto exchanges, liquidity providers, and on-chain wallets across the XRP Ledger and Ethereum. Follow these steps to purchase, store, and utilize Ripple USD:

1. Select an Exchange: Trade RLUSD on Bitstamp, Uphold, Bitso, CoinMENA, and Revolut, or buy it directly with fiat through MoonPay.
2. Register and Verify: Sign up on a centralized exchange, complete KYC verification, and deposit fiat or crypto.
3. Use a Decentralized Exchange: Swap RLUSD on Ethereum-based DEXs by connecting a non-custodial wallet like MetaMask or MyEtherWallet.
4. Choose a Wallet: Store and manage RLUSD onchain in Trust Wallet, Xaman, Ledger, Trezor, or Coinbase Wallet, depending on your preferred blockchain.
5. Opt for Enterprise Custody: Institutions can manage RLUSD securely with Ripple Custody, Fireblocks, or BitGo.
6. Withdraw and Transact: Send RLUSD for cross-border payments, trading, DeFi, or institutional settlements on supported platforms.

Final Thoughts

RLUSD strengthens Ripple’s financial infrastructure, providing a stable digital asset for settlements and tokenized markets while ensuring every transaction on XRPL still consumes XRP.

Unlike most stablecoins, its governance board includes former central bankers and regulators, reinforcing its long-term credibility in both crypto and traditional finance.

With Ripple Payments set to integrate RLUSD for institutional flows, its success could signal a shift where stablecoins become the preferred medium for cross-border finance over legacy banking rails.