Does RLUSD Need XRP to Succeed? Bitcoin Investor Lark Davis Answers

Bitcoin investor and entrepreneur Lark Davis has stated that RLUSD’s success will not drive institutional demand for XRP.

In a recent post on X, he explained that institutions can use RLUSD across multiple blockchains, hold minimal XRP, and still transact at scale.

Ripple has consistently affirmed that RLUSD will not replace XRP. According to Davis, Ripple’s own stablecoin has absorbed the utility that XRP was built to provide, and undermines the cryptocurrency.

RLUSD and XRP Are Separate Conversations

Davis shared a video where he stated that “none of the success of RLUSD really forces institutions to buy and hold any sort of meaningful level of XRP.” He added that institutions could hold as little as “$50 worth of XRP and do thousands of transactions.”

Ripple CEO Brad Garlinghouse has reinforced this separation himself. Davis cited Garlinghouse’s early November statement that “RLUSD competes with other stablecoins, not with XRP.” Ripple has been explicit that the two products serve different purposes.

The Original XRP Use Case

Davis acknowledged that XRP had a genuinely compelling use case when he first bought it in 2017. The concept of a bridge currency was clear. Value would move from one currency to XRP, travel across the world rapidly, and convert into another currency on the other side using XRP as a liquidity pool.

Cross-border payments remain slow and expensive through traditional systems. XRP was designed to solve that problem. It still functions in that capacity through Ripple’s payment network.

Stablecoins Took Over

The issue Davis raises is that stablecoins now dominate the use case XRP was built for. They power payments, trading, and institutional finance at scale. Ripple recognized this and launched RLUSD to compete directly in that space.

Davis explained that the speed and low cost that made XRP useful as a bridging asset are now replicated by stablecoins, without requiring exposure to a volatile asset. RLUSD gives institutions a dollar-denominated option that removes exchange rate risk entirely. Ripple built the competition to XRP’s core value proposition themselves.

Will RLUSD Replace XRP?

Supporters of XRP argue the asset still has a meaningful role. Institutional adoption of RLUSD could strengthen Ripple’s overall network over time, with XRP benefiting indirectly. Certain payment corridors within Ripple’s infrastructure still involve XRP for liquidity, and that demand is real.

Garlinghouse recently explained that expanded RLUSD use brings liquidity to the ledger. The CEO stated that XRP is at the center of everything Ripple does. The question Davis is asking is a fair one. Whether the answer favors XRP depends on how Ripple’s ecosystem develops from here.