Ripple, a fintech company specializing in blockchain-based money transfers, is often associated with the XRP (CRYPTO: XRP) token. However, several of Ripple’s founders and other developers launched XRP in 2012, before Ripple (then known as OpenCoin) was founded.
Ripple subsequently used XRP as a “bridge currency” to accelerate fiat transactions on its platform. By converting both fiat currencies to XRP before swapping them, Ripple processed cross-border money transfers faster and more cheaply than conventional SWIFT transfers. XRP’s supporters expect a growing number of money transfers, along with Ripple’s evolution from a digital payments platform into a full digital bank, to make the token more valuable.
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But in 2024, Ripple launched its own stablecoin, Ripple USD (CRYPTO: RLUSD), which was pegged to the U.S. dollar. Let’s see why this stablecoin could change how the world moves money, and why it could represent an existential threat to XRP.
What are the differences between Ripple USD and XRP?
XRP is a volatile token. Over the past 52 weeks, it’s swung between a high of $3.65 and a low of $1.13. It traded below $1 for most of 2022, 2023, and 2024.
That volatility can be attributed to the SEC’s 2020 lawsuit against Ripple, which alleges the company illegally sold its XRP holdings as unlicensed securities to fund its expansion. That lawsuit caused Ripple to lose its top customers and the top crypto exchanges to delist XRP.
That lawsuit ended in 2025 with a lighter-than-expected fine for Ripple and a ruling that XRP wasn’t an unlicensed security when sold to retail investors. XRP’s price recovered as crypto exchanges relisted the token and crypto firms launched the first XRP spot price ETFs. That was good news for XRP, but its volatility made it unreliable for consistent cross-border transfers.
Ripple USD is much more reliable as a bridge currency because it’s pegged to the U.S. dollar. Every token is an “IOU” issued by an individual gateway (such as Bitstamp or GateHub) on the XRP Ledger. Those gateways back the “IOUs” with U.S. dollars from their own bank accounts.
Ripple’s USD gateways essentially act as “banks” that issue their own digital U.S. dollars, which are far less volatile than XRP. Therefore, Ripple USD could easily cannibalize a large portion of the ledger’s cross-border transfers that previously relied on XRP.