XRP Expert Reveals Why RLUSD Cannot Replace XRP Despite Growing Stablecoin Adoption

In Brief:

• XRP Ledger Foundation executive Vet explains why XRP remains essential to network operations, while Ripple’s RLUSD serves different financial purposes.
• XRP supports transaction fees, account reserves, and decentralized liquidity routing, while RLUSD offers stable value for business payments and transactions.
• Binance has restored RLUSD withdrawals through Ethereum following its $6.3 billion security breach, expanding cryptocurrency access during its recovery process.

XRP Ledger Foundation executive Vet has explained why XRP maintains unique advantages over stablecoins like Ripple’s RLUSD, highlighting its essential role in network operations, liquidity, and decentralization.

XRP Ledger Executive Explains Key Differences Between XRP and RLUSD

According to Vet’s post on X, XRP remains essential to the XRP Ledger, while RLUSD serves an optional purpose, with both assets supporting different financial applications through their distinct technical features.

Vet explained that Ripple issues RLUSD under applicable United States regulations, allowing the company to freeze tokens under certain circumstances, whereas XRP has no central issuer with equivalent control over individual balances.

Additionally, every XRP Ledger account requires an XRP reserve, and users must pay network transaction fees using XRP, while holding RLUSD directly generally requires establishing a trust line. The executive also highlighted XRP’s privileged position within the network’s decentralized exchange infrastructure, particularly its role in facilitating cross-currency transactions.

What's the difference between XRP and stablecoins like RLUSD?

RLUSD is optional. XRP isn't.

RLUSD is a dollar-backed token issued by Ripple. As the issuer, Ripple has to follow US law and can freeze RLUSD. XRP has no issuer and no jurisdiction, and nobody can freeze it. It's a…

— Vet (@Vet_X0) November 3, 2026

Specifically, the exchange automatically evaluates whether routing transactions through XRP provides better conversion rates, allowing the cryptocurrency to connect liquidity across different assets without requiring direct trading pairs.

Meanwhile, Vet identified price stability as RLUSD’s primary advantage for businesses handling payroll, invoices, and operational expenses, while XRP attracts traders and liquidity providers willing to manage cryptocurrency price fluctuations.

Furthermore, market makers can use XRP to bridge liquidity pools without depending on centralized token issuers, reducing issuer-related counterparty risks while remaining exposed to XRP’s market volatility.

Binance Restores RLUSD Withdrawals Following $6.3 Billion Security Breach

The explanation comes as Binance expands cryptocurrency withdrawal services following its October 29 security breach. According to the latest announcement, Binance is restoring RLUSD withdrawals through Ethereum as part of its recovery efforts following the estimated $6.3 billion cryptocurrency theft that disrupted withdrawal services across several networks.

Binance began restoring withdrawals on November 1, prioritizing major cryptocurrencies, including Bitcoin, Ethereum, and XRP. Subsequently, the exchange expanded supported assets to include Ripple’s RLUSD stablecoin and several other dollar-backed cryptocurrencies.

Withdrawal Update

Withdrawals have now been restored for the following assets and networks:

ETH: RLUSD, USD1, TUSD, FDUSD, XUSD

We will continue to restore additional assets and networks in phases following the completion of our security checks. Further updates will be… https://t.co/TgQfjnbFAW

— Binance (@binance) November 3, 2026

The restoration allows Binance customers to transfer RLUSD through Ethereum following the temporary suspension of withdrawal services. Notably, RLUSD’s expanding exchange availability does not change XRP’s mandatory functions within its native blockchain network.

Vet emphasized that stablecoins and XRP serve complementary purposes rather than competing for identical roles within the ecosystem. Ultimately, wider stablecoin adoption could increase XRP Ledger activity, while XRP retains its essential network functions.