Ripple's Legal Saga Is Over. But With Its Stablecoin Pivot, Where Does XRP Go?

The XRP token has been confusing me for years. Its native blockchain, the XRP Ledger, sees minimal usage besides speculation and trading, but the asset consistently stays among the top five in crypto by market cap.

For years the company has had a handy excuse — nobody would work with them because of what they saw as a frivolous SEC suit. Well, that is now ending, so the company no longer has a scarlet letter. Does that mean that the XRP Ledger and its stablecoin will grow to justify the XRP token’s lofty valuation?

I’m not so sure.

Ripple's Legal Saga Is Over. But With Its Stablecoin Pivot, Where Does XRP Go?

The company is finally ending its battle with the SEC. But its blockchain still sees little use and its stablecoin is facing an uphill battle.

Fresh off of getting the Securities and Exchange Commission’s (SEC) monkey off of his back, Ripple Labs CEO Brad Garlinghouse is operating like he has a new lease on life. 

On July 2, the company announced that it is applying for a federal bank charter via the Office of the Comptroller of the Currency (OCC), hoping to become just the second company after Anchorage Digital to achieve the distinction. In addition, its New York State-regulated custody provider, Standard Custody and Trust Company, is trying to become the first crypto firm to get a highly coveted Fed master account so that it can directly hold deposits underpinning its $469 million stablecoin RLUSD at the Federal Reserve.

“True to our long-standing compliance roots, @Ripple is applying for a national bank charter from the OCC, " said Garlinghouse in a tweet on July 2. “If approved, we would have both state (via NYDFS) and federal oversight, a new (and unique!) benchmark for trust in the stablecoin market.”

The company is continuing to build out RLUSD infrastructure, announcing a tie-up with Switzerland-based AMINA Bank, and it has partnered with London-based OpenPayd to build out a payments network using the stablecoin. 

And if that were not enough, the XRP token, which is primarily owned by Ripple Labs and is native to the XRP Ledger (XRPL), is up 347% since Nov. 1. It is also likely getting its first spot ETF in the U.S. later this year. However, its price has remained largely stagnant for the past six months. 

Serious questions remain about the future of Ripple Labs, the XRPL, and even its stablecoin. But the biggest questions remain around its original token, XRP. 

With Ripple seeming to pivot more toward stablecoins, a strong argument can be made that if RLUSD actually does grow, it could cannibalize whatever potential XRP demand Ripple has been trying to drum up for years. 

It is a new day for Ripple, but old questions remain for the blockchain company, and something likely needs to change for XRP to unlock its next stage of price growth. Here are two key challenges to watch.

XRP’s (Still) Limited Usage

In March 2024, I wrote a story in Forbes called The Rise of Crypto’s Billion Dollar Zombies. Based on my reporting for the story, the decision was made to focus on the XRPL as a main character. 

I wrote, “In terms of global money flows, not much is going on at Ripple Labs today, and few expect it ever to disrupt the Belgian banking cooperative known as SWIFT, which facilitates $5 trillion in interbank transfers every day. Despite failing at its primary mission, Ripple’s blockchain, a ledger of XRP transactions, continues to hum along. It’s largely useless, but the XRP token still sports a market value of $36 billion, making it the sixth-most valuable cryptocurrency.” 

That language was obviously harsh, but in the story I pointed out that the XRPL only earned $583,000 in fees in 2023 despite having a market capitalization of $36 billion at the time. That gave it an eye-watering price-to-sales ratio of 61,690. And keep in mind that by that point the company had been around for 12 years (this was not a pesky startup getting off the ground). To me these findings meant that XRP was primarily seen as a memecoin and little else.

Here’s what happened to XRPL in the period since. The ledger earned $1.15 million in fees over the course of 2024, an increase of just $567,000. At the same time, its market cap grew by over $80 billion from $33.32 billion at the start of 2024, giving it a price-to-sales ratio of 103,826. 

Not too much is happening on XRPL that would justify an increase in price. Its flagship decentralized exchange (DEX) stays under $100,000 in daily volume more often than not. By comparison, market leader PancakeSwap handles over $1 billion in daily spot volume, and that is not even getting to the growing derivatives DEX industry, where the two top exchanges, Binance and Hyperliquid, process trillions of dollars in transactions on a monthly basis.

Non-fungible tokens (NFTs) are another area where the XRPL is lagging. According to data from Messari, the blockchain averaged about 550 daily NFT traders in 2024. Even in a market such as this, where NFTs are struggling, Ethereum typically has five thousand daily traders. 

It also appears that the XRPL has struggled to bring on native smart contracts, something that is table stakes for the blockchain now that its tunnel-vision focus on payments is being expanded. But as of June 30, Ripple Labs launched an EVM-compatible sidechain with Axelar that could supplement this gap. XRP will serve as the gas token and native asset for this new blockchain, perhaps unlocking another source of demand for the token aside from paying for payments on the XRPL. But the company has a lot of work to do to use this avenue to create real, non-speculative user demand for XRP.

What About RLUSD?

In addition, XRP holders need to also wonder how the launch of Ripple Labs’ stablecoin RLUSD will impact demand for the token. After all, XRP was initially intended to be a bridge currency to help banks convert currencies more cost effectively and more efficiently. An argument could be made that launching a stablecoin directly competes with that goal, especially if it contributes to the prolonged dollar primacy that the U.S. very much wants to maintain and reaches into other countries underserved by the greenback. 

After all, stablecoin growth has taken off like a rocket ship. The total supply of stablecoins is now $254.79 billion, and the entire industry is still processing USD Coin issuer Circle’s highly profitable IPO last month. The U.S. government is inching ever closer to passing the GENIUS Act, which would be the first piece of crypto legislation ever to become law and it would set the rules of the road for stablecoins moving forward. With the amount of money being put into the industry and its regulatory tailwinds, it is easy to understand why many people see stablecoins, not something like XRP, as the future of payments.

Still, I can see a world where there is space for both use cases and assets. After all, unless an emerging market follows the lead of a country like El Salvador and accepts the dollar as its official currency, there will be a need for foreign conversions. Though an argument could be made that stablecoins would also be a better bridge currency than XRP because of their lower volatility. 

The need for both tokens is a sentiment expressed by Ripple Labs CTO David Schwartz in an interview last spring around the launch of the token. “Having multiple paths to give customers a better experience means you have more customers,” said Schwartz. “If we only did things with XRP, then where XRP wasn’t available, we would just have to tell a customer no.” But the total addressable market for XRP likely has to be smaller than it was back in 2012 when Ripple Labs was created.

Aside from the ascendance of stablecoins in general, Ripple may have had another reason to launch RLUSD: the scarlet letter attached to XRP as a result of the SEC enforcement action against Ripple Labs. “Ripple may have felt like they had no choice but to issue a stablecoin in order to convince banks and other financial institutions to work with them,” said Owen Lau, executive director at Oppenheimer & Co in an April 2024 interview with Forbes. “These firms may not have been comfortable holding and using XRP because of the volatility and regulatory overhang [stemming from an ongoing lawsuit with the SEC].” 

But for RLUSD to achieve breakaway growth and perhaps feed value back into XRP, Ripple needs to move quickly. As most readers already know, the stablecoin market is dominated by two industry giants: Tether ($158.3 billion) and Circle ($62 billion). Ripple’s best chance might be finding a way to drive value and usage on its new sidechain, perhaps through incentivizing the use of RLUSD, which could lead to increased demand for XRP in order to pay gas fees. But that is a very big if.  

Both Circle and Tether and their tokens have already achieved mass distribution and are working harder to grow their empires. Tether dominates trading and it also just announced that its token will be able to be used to pay gas fees on a new blockchain called Stable. Circle has a high-profile partnership with Coinbase, which is promoting usage of USDC on its blockchain called Base and has launched a partnership to allow merchants using Shopify to pay with USDC. 

Despite excitement over stablecoins, this is not a blue ocean for RLUSD.

Ripple’s One Advantage 

If Ripple Labs has one card up its sleeve, it is the fact that it is probably the best capitalized crypto company in the world. According to its Q12025 report, the company currently holds 4.56 million XRP tokens in its wallet, worth $10.27 billion. But that is not all: the company also has 37.1 million XRP tokens in escrow, worth $83.5 billion, that will become unlocked in the coming years. 

Even though it could never fully recoup that much money if it tried to sell it all, it still seems virtually impossible for the company to ever run out of funds.

What that means for XRP holders is that the company has unlimited resources to try and build out demand for its new EVM sidechain and bootstrap partnerships and usage for RLUSD or even XRP. 

But then again, none of this may matter to XRP holders who do not seem concerned about this massive sell wall to come. After all, despite limited new traction for the XRPL ledger in recent years, the token’s price continues to defy gravity. 

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