A fresh debate inside the XRP Ledger community has brought the relationship between XRP and stablecoins back into focus. Vet, an XRPL dUNL validator and contributor to the XRPL Foundation, said the two are not rivals. His view was blunt: XRP and stablecoins are complementary parts of the payment stack. The discussion now turns on how payment routing, liquidity, and bridge assets should work on XRPL.
Vet says a stablecoin flow is not the same as a cross-currency bridge
The exchange started after researcher Eri said Ripple has used Tether and USDC to support On-Demand Liquidity flows, while liquidity on XRPL still remains central. Eri also argued that XRP has roles beyond payments, naming collateral and DeFi as examples. She pointed to future financial products on XRPL that could use XRP for more than simple transfer settlement.
Vet replied by saying the so-called “stablecoin sandwich” behaves more like a normal payment than a cross-currency payment. In his description, local currency swaps can happen at the sending and receiving ends. That means the swap does not have to occur on-chain and does not have to touch the XRPL DEX. Even so, he said service providers still need quality assets and stablecoins to build reliable payment flows.
More issued assets on-chain can mean more fragmented liquidity
Vet’s main argument is about the need for a bridge asset. Once many issued currencies exist on-chain, he said, markets still need a way to connect them. Without that bridge, liquidity can be split across too many direct pairs. On XRPL, XRP can fill that role when a bridge transaction makes economic sense. That is the real fault line in the debate: stablecoins may suit routes where price-stable settlement is enough, but cross-asset routing may still need a native asset that sits outside any single issuer’s control.
The issue is not abstract. Earlier reporting said the XRPL Foundation’s AMM proposal would add StableSwap and concentrated liquidity, aiming to improve pricing for stablecoins, RWAs, and DeFi assets while cutting slippage for assets that trade close to the same value. Stablecoins are central to that design.
Native neutrality remains the case for XRP
Vet also argued that an issued asset should not become the main bridge asset on a decentralized network, because regulated issuers must follow local laws. In that framework, a native asset is better suited for neutral bridging because no single issuer controls the system.
The discussion still does not settle whether stablecoins weaken or support demand for XRP. It does show how XRPL builders are separating the two into different tools. The source material notes that RLUSD has expanded to 40 chains, widening Ripple’s stablecoin reach across payments, tokenization, and institutional liquidity. At the same time, XRP Ledger utility is extending beyond payments into tokenized assets, DeFi, and lending. The live question is less about replacement and more about division of labor: stablecoins for price-stable settlement routes, XRP for neutral cross-asset liquidity where fragmentation becomes a problem.