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Ripple Gradually Reducing XRP Role to Just Transaction Fees: Pundit
May 8, 2025
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Amid the rising prominence of RLUSD in the crypto market, concerns about the diminishing role of XRP have triggered discussions within the community.
Community member Elena Schoen, who describes herself as a Chain Detective, recently raised concerns that Ripple may be slowly sidelining XRP, relegating it to a limited function.
Is Ripple Replacing XRP with RLUSD?
Taking to X, she suggested that XRP is now primarily serving the function of transaction fees on the XRP Ledger, with RLUSD taking over broader utilities such as liquidity, cross-border transactions, retail and institutional settlements, and multi-fiat onboarding.
Schoen urged the community to examine Ripple’s website carefully and form opinions backed by facts. She argued that the only fundamental need for XRP is its role in covering fees.
According to her, RLUSD is becoming the preferred asset for virtually all other functionalities on the XRPL, despite XRP being the default bridge asset. She further argued that with time, even that default status might lose its weight.
Notably, these concerns have surfaced as RLUSD continues to gain traction. Since its launch in December 2024, RLUSD has surged in popularity, recently earning a listing on Gemini, a leading U.S.-based trading platform. The stablecoin now ranks as the twelfth largest in the sector with a market cap of $316 million and a 24-hour volume of $59 million.
Others Disagree
However, not all community members share Schoen’s apprehension. One Alex Beesley argued that RLUSD is likely the first in a series of regional stablecoins, including potential versions like RLGBP, RLEUR, and RLJPY. He claimed that XRP will be important as the common thread that binds these currencies.
Meanwhile, Dennis Piwi suggested that XRP’s value lies in its behind-the-scenes role as the “silent backbone” of tokenized finance, enabling frictionless swaps across stablecoins and CBDCs. To him, the real strength of XRP is in infrastructure rather than hype.
Also, last month, after Ripple announced the integration of RLUSD into Ripple Payments, concerns emerged within the XRP community. However, pundits like “All Things XRP” stressed that the two assets would complement each other, with RLUSD providing price stability and XRP offering speed and efficiency.
Previous Comments from Ripple Executives
Notably, in response to these growing concerns, Ripple executives have reiterated their commitment to utilizing XRP. For instance, during the 2024 XRP Ledger Apex summit, Ripple CTO David Schwartz explained that stablecoins like RLUSD are important for maintaining pricing consistency and minimizing volatility.
However, he indicated that XRP maintains an important role within the XRPL through advanced features like pathfinding and auto-bridging that favor its liquidity.
Schwartz also stressed in October 2024 that RLUSD could not replace XRP due to the latter’s unique properties, including its role in transaction fees, immunity to freezing, and independence from jurisdictional constraints.
Moreover, President Monica Long addressed the community last October following the announcement of RLUSD’s exchange partners. She reiterated that Ripple’s dual-token strategy is intentional, allowing clients to choose between XRP and RLUSD depending on their transaction needs.
In a January 2025 interview with Citizens Bank, Ripple CEO Brad Garlinghouse confirmed that RLUSD and XRP serve distinctly different purposes. He explained that RLUSD represents fiat on-chain, whereas XRP acts as a bridge asset essential for enabling liquidity between different currencies.
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