Ripple USD

Ripple's Dollar: Inside the Compliance-First Stablecoin Reshaping Cross-Border Payments

Ripple USD (RLUSD) emerged in December 2024 as Ripple Labs' direct entry into the stablecoin market, a sector the company had previously approached only indirectly through its cross-border payments infrastructure.

The token now carries a market capitalization exceeding $1.3 billion, with approximately 1.4 billion tokens in circulation across two blockchains. Monthly transfer volume has reached $5 billion, and the holder count stands at roughly 38,000 addresses. These figures place RLUSD among the top ten U.S. dollar-denominated stablecoins less than thirteen months after launch.

RLUSD addresses a specific gap that Ripple's existing products could not fill: the need for a price-stable digital asset within its payments ecosystem that does not expose counterparties to the volatility of XRP (XRP).

Banks and payment providers using Ripple's infrastructure had long relied on third-party stablecoins or volatile bridge assets.

The stablecoin's rapid growth reflects institutional demand for regulated dollar representations on blockchain rails rather than retail speculation. RLUSD's velocity metric—the number of times each token changes hands—reached 71 in 2025, the second-highest among major stablecoins behind only Tether (USDT).

From Payment Network to Stablecoin Issuer

Ripple Labs traces its origins to 2012, when Chris Larsen and Jed McCaleb transformed an earlier peer-to-peer payment concept into a blockchain-based cross-border settlement network.

The company spent over a decade building relationships with financial institutions, positioning XRP as a bridge currency for international transfers. Brad Garlinghouse, who became CEO in 2016, steered the firm through a $200 million Series C funding round and a protracted legal battle with the U.S. Securities and Exchange Commission.

The stablecoin initiative crystallized after Circle's USD Coin (USDC) temporarily lost its dollar peg during the Silicon Valley Bank crisis in March 2023. Ripple's leadership concluded that institutional clients needed a stablecoin they could trust to remain stable even during banking sector stress.

Standard Custody & Trust Company, a wholly-owned Ripple subsidiary operating under a New York Department of Financial Services trust charter, issued the first RLUSD tokens on December 17, 2024. The launch followed months of testing on both Ethereum and the XRP Ledger.

RLUSD entered a stablecoin market already dominated by Tether and Circle, which together control approximately 85% of total stablecoin supply. Rather than competing directly for retail trading volume, Ripple positioned RLUSD as infrastructure for enterprise payments and institutional settlement.

Dual-Chain Architecture and Token Mechanics

RLUSD operates natively on two distinct blockchain networks, each offering different technical characteristics suited to different use cases.

On Ethereum (ETH), RLUSD functions as an ERC-20 compliant token. The smart contract implements the UUPSUpgradeable pattern, allowing Ripple to update contract logic without changing the token address. Multiple independent third-party audits have examined the Ethereum implementation. The mainnet contract address is 0xCfd748B9De538c9f5b1805e8db9e1d4671f7F2ec.

On the XRP Ledger, RLUSD utilizes the native trust line token standard rather than smart contracts. Users must configure a trust line to the issuer and maintain an XRP balance for reserve requirements. The issuer can enable RequireAuth settings, requiring explicit allow-listing before accounts can receive tokens.

Standard Custody & Trust Company maintains exclusive control over minting and burning operations on both networks. These functions require multiple authorized signatures through a custom MultiSign contract, preventing any single employee from executing critical actions independently.

The distribution between chains reveals market preferences. Approximately 82% of RLUSD supply—over $1 billion—resides on Ethereum, with the remaining 18% on the XRP Ledger. This imbalance reflects Ethereum's deeper DeFi liquidity and more mature financial infrastructure rather than any technical limitation.

RLUSD incorporates freeze functionality for addresses associated with sanctions lists or fraudulent activity.

Ripple announced in December 2025 plans to expand RLUSD to Ethereum Layer 2 networks including Optimism, Base, Ink, and Unichain using Wormhole's Native Token Transfers standard. This multichain expansion aims to reduce transaction costs while preserving RLUSD's native control mechanisms.

Reserve Structure and Transparency Mechanisms

Every RLUSD token claims backing by at least one dollar worth of reserve assets held in segregated accounts.

Reserve composition includes U.S. dollar cash deposits, short-term U.S. Treasury bills, and other cash-equivalent liquid assets. The issuer does not hold volatile crypto assets in reserves, distinguishing RLUSD from algorithmic or crypto-collateralized stablecoins.

Bank of New York Mellon became the primary custodian of RLUSD reserves in July 2025. The appointment brought one of America's oldest financial institutions into direct support of Ripple's stablecoin operations. BNY Mellon also provides transaction banking services to underpin RLUSD's day-to-day operations.

Deloitte conducts third-party attestations of RLUSD reserves on a regular basis. These attestation reports verify that reserve assets meet or exceed outstanding token supply.

As of late 2025, published attestations showed reserves of $1.19 billion against circulating supply of $1.14 billion, maintaining a buffer above the 1:1 requirement.

The reserve model mirrors other fiat-backed stablecoins like USDC rather than algorithmic approaches that failed spectacularly with TerraUSD in 2022. Users can theoretically redeem RLUSD for dollars through authorized channels, though the primary use case remains on-chain transfers and settlement.

RLUSD's regulatory framework under the NYDFS trust charter requires strict reserve management, asset segregation, and clear redemption rights—standards that exceed those applied to many offshore stablecoin issuers.

From Settlement Layer to Payment Infrastructure

RLUSD's primary value proposition centers on cross-border payments rather than DeFi speculation or trading collateral.

Ripple Payments, the company's enterprise cross-border settlement product, integrated RLUSD in April 2025. Financial institutions using the service can now settle international transfers using a regulated stablecoin rather than volatile crypto assets or slow correspondent banking rails.

The Mastercard pilot represents RLUSD's most significant mainstream adoption milestone. Announced at Ripple's Swell 2025 conference, the initiative tests stablecoin-based settlement for credit card transactions on the XRP Ledger. WebBank, the FDIC-insured issuer of the Gemini Credit Card, participates alongside Gemini as the infrastructure provider.

If successful, the pilot could replace traditional settlement rails that take one to three days to clear transactions between merchant banks and card issuers. The $20 trillion annual credit card market represents a substantial addressable opportunity, though capturing meaningful share would require expansion beyond a single card issuer.

Non-profit organizations including World Central Kitchen and Water.org announced partnerships to use RLUSD for cross-border humanitarian aid payments.

VivoPower's electric vehicle subsidiary Tembo e-LV began accepting RLUSD payments in September 2025, citing faster settlement times and lower costs compared to traditional wire transfers.

BlackRock uses RLUSD as collateral within certain tokenized asset operations, providing institutional validation for the stablecoin's compliance framework.

Regulatory Positioning and Jurisdictional Approvals

RLUSD operates within one of the most comprehensive regulatory frameworks of any stablecoin currently in circulation.

The New York Department of Financial Services trust charter under which Standard Custody & Trust Company operates imposes requirements for reserve composition, capital adequacy, anti-money laundering compliance, and regular regulatory examinations. New York's regulatory framework predates federal stablecoin legislation and remains among the strictest in the United States.

The GENIUS Act, signed into law on July 17, 2025, established the first comprehensive federal framework for payment stablecoins. RLUSD appears positioned among the top U.S.-regulated stablecoins ready for GENIUS Act compliance. The legislation requires 100% reserve backing, monthly attestations, federal licensing, and robust anti-money laundering programs.

The Office of the Comptroller of the Currency conditionally approved Ripple's national trust bank charter application, adding federal oversight alongside the existing NYDFS license. Ripple has also applied for a Federal Reserve master account, which would allow the company to hold reserves directly with the central bank.

Dubai's Financial Services Authority included RLUSD among three approved stablecoins under its revamped crypto framework, alongside USDC and EURC. The approval opened regulated access to Dubai's financial hub.

Singapore's Monetary Authority granted clearance for Ripple to expand XRP and RLUSD payments operations in December 2025.

Centralization, Competition, and Structural Vulnerabilities

RLUSD inherits the fundamental trade-offs common to all centralized fiat-backed stablecoins.

Standard Custody & Trust Company maintains complete control over minting, burning, and account freezing. Users must trust that the issuer will honor redemption requests and maintain adequate reserves. Government actions, regulatory changes, or operational failures at the issuing company could affect the entire token supply.

Critics argue that RLUSD exacerbates centralization concerns already associated with Ripple. The company controls a significant portion of XRP supply, and its governance model has been contentious within the broader crypto community. Adding a centralized stablecoin to this ecosystem concentrates further power in Ripple's hands.

Some question whether RLUSD might cannibalize XRP's use cases. If enterprises prefer the price stability of RLUSD over XRP's volatility for settlement purposes, the native token's utility could diminish. Ripple counters that the two assets serve complementary functions, with XRP providing network fees and liquidity while RLUSD handles value transfer.

The competitive landscape remains forbidding. Tether's USDT dominates with over $180 billion in market capitalization and entrenched exchange relationships. Circle's USDC holds approximately $78 billion and benefits from deep institutional integrations, a successful 2025 IPO, and first-mover advantage in regulatory compliance. RLUSD's $1.3 billion represents less than 1% of combined USDT and USDC market share.

Research from the Chicago Booth School identifies run risk as a structural concern for all major stablecoins. If large redemption requests forced rapid liquidation of reserve assets, the resulting market impact could threaten the dollar peg. The small number of arbitrageurs able to redeem stablecoins at par concentrates redemption capacity.

RLUSD's heavy concentration on Ethereum—82% of supply—creates dependency on that network's infrastructure, gas fees, and congestion patterns. The XRP Ledger implementation, while technically robust, has not attracted comparable liquidity due to its trust line requirements and thinner DeFi ecosystem.

Institutional Infrastructure or Enterprise Experiment

RLUSD's future trajectory depends on whether enterprise adoption can scale beyond pilot programs to production-grade payment volumes.

The Mastercard pilot provides a template for how regulated blockchain settlement might integrate with existing card payment infrastructure. Success would require expanding beyond WebBank to dozens of issuers globally—a process that could take years of regulatory approvals and technical integration work.

Ripple's national bank charter application and Federal Reserve master account request signal ambition to operate as core financial infrastructure rather than a peripheral crypto service. Direct access to Fed payment rails would position RLUSD reserves alongside traditional bank deposits in terms of safety and liquidity.

Layer 2 expansion could address RLUSD's current limitation as primarily an institutional settlement tool. Lower transaction costs on networks like Base and Optimism might enable retail and DeFi use cases that Ethereum mainnet fees currently preclude.

The stablecoin market itself continues rapid expansion, with total supply growing from $204 billion to over $300 billion during 2025.

Eighteen stablecoins now exceed $1 billion in supply, up from eleven at the start of the year. This proliferation suggests room for specialized issuers serving distinct market segments rather than winner-take-all dynamics.

RLUSD's compliance-first positioning aligns with the GENIUS Act's requirements and broader regulatory trends favoring transparent, fully-backed stablecoin models. Post-TerraUSD risk aversion among institutions has reinforced demand for audited, conservative designs.

The core question is whether Ripple can leverage its existing relationships with financial institutions to drive RLUSD adoption, or whether the stablecoin will remain a niche tool within Ripple's own ecosystem. The answer will determine whether RLUSD becomes meaningful infrastructure or remains an interesting experiment in enterprise blockchain settlement.