Ripple's RLUSD stablecoin is seeing record adoption, but its success further complicates the investment case for the company's native token, XRP.
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Ripple's RLUSD Stablecoin Hits New High as XRP Underperforms
Ripple's dollar-pegged stablecoin, RLUSD, reached a new all-time high in market capitalization on May 20, surpassing its late-April peak as institutional adoption continues to accelerate for the company's financial products.
The milestone, however, casts a brighter spotlight on the growing divergence between the success of Ripple's business and the lagging performance of its native cryptocurrency, XRP. According to analysis from multiple industry reports, the very success of RLUSD may be a primary factor in the token's underperformance, a dynamic that is not lost on long-term investors.
The stablecoin's ascent comes as XRP languishes, down approximately 60 percent from its all-time high. While Ripple has inked partnerships with major financial players like Deutsche Bank, JPMorgan, and Mastercard, these deals increasingly utilize Ripple's software infrastructure and its RLUSD stablecoin for settlement, rather than creating direct buying pressure for XRP.
This trend underscores a fundamental challenge for the XRP investment thesis. The token was designed to be a bridge asset for fast, cheap cross-border payments, but financial institutions have shown a strong preference for the stability of RLUSD, avoiding the price volatility inherent in holding XRP on their balance sheets.
The Great Decoupling
The core of the issue lies in utility. While Ripple the company is building a formidable global financial network, its partners can leverage that network without ever touching the XRP token. The introduction of RLUSD has provided an official, in-house alternative to XRP for settling cross-border transactions, a feature that is heavily promoted on Ripple's own website.
This creates a situation where Ripple's corporate wins do not translate into token appreciation. For institutions, using a stablecoin like RLUSD for payments is a far more attractive proposition than using a volatile asset. It solves the speed and cost problem of the legacy SWIFT system without introducing the new problem of asset volatility.
A Tale of Two Assets
The divergence is further exacerbated by XRP's own supply dynamics. Ripple still holds a significant portion of the total XRP supply in escrow, unlocking 1 billion tokens each month. While a majority is often re-locked, the consistent release of new supply into the market creates a headwind for the price that RLUSD does not face.
As RLUSD's market cap continues to climb, it serves as a direct measure of the adoption of Ripple's payment rails by institutions. Yet, it also measures the demand for a settlement asset that is explicitly not XRP. For investors, the takeaway is becoming clearer: the success of Ripple's stablecoin is a sign of the company's health, but it may signal a future where the XRP token is increasingly left behind.
This article is for informational purposes only and does not constitute investment advice.
[1] Ripple's RLUSD Hits New All-Time High in Market Cap[2] Ripple Is Underperforming Everything. Is XRP Still the Smartest Crypto Buy Right Now?[3] Ripple's growth is not XRP's growth[4] XRP Price: Why Ripple's Institutional Wins Keep Piling Up Without an XRP Rally[5] Is XRP (Ripple) Still a Good Long-Term Investment After the 2026 Drawdown?
