Stablecoins Take Center Stage as Ripple's Institutional Deals Shift

Ripple's On-Demand Liquidity product has been widely adopted by over 300 institutions on RippleNet, with roughly 40% of them actively using it. This service allows firms to convert local currency into XRP, move it across the ledger in seconds, and then have the receiving partner convert it into the destination currency on arrival.

This process cuts costs by 40-85% against correspondent banking. Japan's SBI Remit, for example, uses ODL to move around $2 billion a year into the Philippines, Vietnam, and Indonesia through XRP. Similarly, Bitso does the same on the US dollar to Mexican peso route for Latin America's largest crypto platform.

However, most of Ripple's institutional deals now settle in its RLUSD stablecoin rather than XRP. The stablecoin has grown rapidly, with its supply moving off Ethereum and onto the XRP Ledger, which now holds about 52% of the token against Ethereum's 48%. This shift was expected to help XRP by increasing its liquidity and stability.

RLUSD is dollar-pegged, fully backed by cash and US Treasuries, and regulated by the New York DFS. Its holder count has grown 21.8% over the past 30 days to 74,056, while monthly active addresses fell 29.7% to 7,693.

Ripple executives have said that they expect RLUSD's growth to benefit XRP by increasing its liquidity and stability. However, for this to happen, XRP's price needs to stop swinging, allowing a compliance team to sign off on settling deals in the token. Until then, stablecoins will continue to play a major role in institutional deals.