Sagar Shah, Chief Business Officer at Evernorth, published a detailed breakdown on May 20 arguing that Ripple’s RLUSD stablecoin and XRP token serve fundamentally different functions in on-chain finance and should not be viewed as competing assets. RLUSD functions as a digital dollar for settlement, while XRP operates as a neutral routing layer between non-dollar asset pairs. The distinction addresses a recurring debate within the XRP community about whether dollar-backed stablecoins eliminate the need for XRP as a bridge asset.
The Routing Layer Problem RLUSD Cannot Solve
As tokenized assets proliferate on blockchain networks, the market structure challenge becomes acute: direct trading pairs between all assets become economically inefficient. Shah illustrates the scaling problem with concrete math. With 10 different assets on-chain, traders need 45 possible trading pairs. With 100 assets, that number jumps to 5,000 pairs. XRP solves this by functioning as a neutral intermediary that enables indirect trades without requiring a counterparty willing to hold both sides of a pair. RLUSD, as a dollar representation, cannot fill this role because it only bridges dollar-denominated transactions. XRP bridges everything else.
How RLUSD and XRP Work Together in Practice
Shah uses a specific example: “The XRP step is invisible to the trader. They see ‘Treasury bill in, euro stablecoin out.’ But the XRP in the middle is what makes the trade possible.” This describes a transaction where XRP provides liquidity between two non-dollar assets without the trader ever knowing it occurred. RLUSD handles the dollar leg of settlement separately. At press time, XRP was trading at $1.37. Shah characterizes RLUSD’s role plainly: “RLUSD isn’t trying to be the swap kid. It’s trying to be a juice box”—a utility for dollar settlement, not market routing.
Neutrality as Infrastructure Requirement
Shah emphasizes a critical constraint: XRP’s value as routing infrastructure depends on its neutrality across jurisdictions and counterparties. He states: “The router has to work for everybody across jurisdictions and counterparties, without an intermediary who can decide who’s allowed to trade.” This requirement explains why a dollar-backed stablecoin cannot replace XRP’s function. A stablecoin is inherently tied to a specific currency and issuer jurisdiction. A neutral routing asset must remain detached from any single monetary system to serve cross-border settlement efficiently.
The Debate Continues Without Ripple Comment
Shah’s May 20 argument represents the clearest public explanation of the RLUSD-XRP relationship from a major blockchain finance operator, but Ripple itself has not released an official statement addressing the debate. As tokenized finance expands, clarity on how different Ripple assets function will likely become a key narrative for institutional adoption. The distinction Shah outlines—stablecoin as settlement layer, token as routing layer—may serve as the framework for how similar projects structure multi-asset infrastructure.
