Ripple News: Is RLUSD a Threat to XRP? Experts Weigh In

XRP recently saw a significant price drop, falling from $2.59 to $2.31 within just 24 hours. This 12% decline also reduced its market cap to $131.42 billion, causing XRP to lose its spot as the third-largest cryptocurrency, now behind Tether (USDT). Additionally, futures trading volume dropped from $32 billion to $16 billion, signaling a decrease in market activity.

Here’s everything you should know.

Why Did XRP’s Price Fall?

The price drop is mainly due to increased selling pressure and market speculation, especially after the delay of Ripple’s RLUSD token launch. This delay has sparked concerns in the community that RLUSD could negatively affect XRP, which was initially set to operate on the XRP Ledger (XRPL).

However, many analysts dismiss these fears, and here’s why they’re not a major concern.

RLUSD Won’t Replace XRP, It Will Enhance It

Vincent Van Code, a key figure in the XRP community, cleared up the confusion around Ripple’s RLUSD token. He confirmed that RLUSD will not replace XRP but will enhance the XRP Ledger. XRP remains the backbone of the XRPL, enabling efficient cross-border transactions and addressing the flaws of traditional forex systems.

Through XRP, currencies like AUD and USD can be paired directly with it, cutting costs and boosting efficiency.

A key feature of the XRP Ledger is its auto-bridging capability, which makes currency conversions easy. For example, sending RLUSD to someone in RLYEN is smooth due to XRPL’s decentralized exchange (DEX) and automated market maker (AMM) pools. These pools help stabilize prices and keep things running smoothly, even during market volatility.

XRP continues to play a central role in powering this system.

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Ripple’s Strategy

Ripple’s CTO, David Schwartz, emphasized that XRP is vital to the XRPL because it is decentralized and doesn’t rely on a middleman. While RLUSD introduces new features to the ecosystem, it works alongside XRP rather than replacing it. Experts believe RLUSD’s launch could increase XRP’s value over time, with predictions ranging from modest gains to a potential high of $10 within a year.

Ripple Labs CEO Brad Garlinghouse mentioned that RLUSD will mainly target large institutional players. He added that once RLUSD is available, Ripple will use both RLUSD and XRP in its cross-border payment solutions, improving the overall user experience.

Is RLUSD a Threat to XRP?

While it’s still unclear whether RLUSD poses a threat to XRP, XRP’s recent rise toward the end of the year shows it still has strong growth potential. The launch of RLUSD could provide a boost to this positive momentum, rather than acting as a setback.

XRP’s resilience and its crucial role in the XRPL keeps it firmly in the spotlight.

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