Crypto Founder Explains Why RLUSD Cannot Replace XRP as the XRPL Routing Asset

Jake Claver, chairman of Digital Ascension Group, has argued that RLUSD and XRP serve fundamentally different roles on the XRP Ledger.

He disagrees with the idea that Ripple’s dollar-backed stablecoin could make XRP unnecessary.

In a 25-part post on X, Claver compared the XRP Ledger to an airline system. He said XRP acts like a central hub, helping connect two assets when there isn’t enough direct liquidity between them.

XRP as the “Connecting Flight”

Claver said connecting hundreds of tokenized assets directly would require thousands of liquidity pools. For example, connecting 100 assets directly would need 4,950 pools. Using one central hub would require only 100 connections.

He said XRP serves as that hub on the XRP Ledger. For example, a trade between a tokenized money market fund and a yen stablecoin could use XRP to connect the two. The transaction could happen in one step, while the XRP part stays hidden from the user and provides the liquidity needed to complete the trade.

Why RLUSD Is Different

Meanwhile, Claver said RLUSD is a digital dollar designed to stay worth $1, backed by reserves held by its issuer. He noted that RLUSD can settle transactions quickly, even outside normal banking hours.

However, he said many tokenized-asset trades won’t involve dollars. For example, a trade could involve tokenized bonds and commodities or two non-dollar assets.

In these cases, RLUSD may not be the best asset to use in the middle of the transaction. Claver also pointed out that RLUSD depends on its issuer, including its reserves, banks and regulatory requirements.

Why XRP Is Different

Claver said XRP’s key advantage is that it is native to the XRP Ledger and isn’t issued by a company. This means no company can freeze or restrict individual XRP units.

He argued that this makes XRP useful as a neutral asset for connecting different assets on a network where the parties may not know or trust each other.

In simple terms, Claver’s point is that RLUSD can be used as a digital dollar, while XRP can act as the bridge that connects different assets.

RLUSD and XRP Can Coexist

Claver said RLUSD and XRP can work together because they have different roles. RLUSD can be used when a transaction needs to be settled in dollars. XRP, meanwhile, can act as a neutral bridge between different assets when there isn’t enough direct liquidity.

As more assets are tokenized on the XRP Ledger, this difference becomes important, as liquidity can become spread across hundreds of assets and trading pairs.