RLUSD Hits a Record. Why Hasn't XRP Moved With It?

In the last week of September, RLUSD, Ripple’s own dollar stablecoin, reached about $2.5 billion, the most there has ever been. About a month earlier it had only just crossed $2 billion, so roughly half a billion new dollars arrived in four weeks. Over the same stretch, XRP bounced between about $1.28 and $1.57.

The host, George Lee, frames the video around one question for anyone holding a meaningful amount of XRP: when the dollar on our ledger keeps growing, what are our coins actually doing while we wait? Here is what RLUSD is, how much of it really lives on the XRP Ledger, who earns the interest behind it, and why its growth and XRP’s price can move separately.

What is RLUSD?

RLUSD is a digital dollar issued by a Ripple trust company supervised in New York. The video compares it to a casino chip that is always worth a dollar, except you can cash it in any day and send it around the world in seconds. Behind every token is cash and short-term US government debt, and that debt pays interest every day.

Ripple publishes a reserve report every month, checked by an outside accountant. According to the video, it showed about $2.4 billion of RLUSD on September 3, with slightly more than that held in reserve.

Ripple CEO Brad Garlinghouse, speaking at the Economic Club of New York earlier this year, called the US stablecoin law “an unlock.” Once the rules were written down, he said, banks and company finance teams felt safe using stablecoins, and Ripple saw a big uptick in activity.

How much RLUSD is on the XRP Ledger?

Less than half. On September 26, a report using DefiLlama data put about $1.1 billion of RLUSD on the XRP Ledger, out of roughly $2.5 billion. Most of the rest is on Ethereum. On August 25, Ripple’s own account had said close to $1 billion had been issued on the XRP Ledger.

There is another way to read the same numbers. That billion makes RLUSD more than 92% of every stablecoin on the XRP Ledger. Ripple issues it natively there, and it has become the ledger’s main dollar.

Why hasn’t XRP moved with it?

Because RLUSD does not need XRP to go up. Moving RLUSD on the XRP Ledger uses only:

• a tiny amount of XRP burned as a fee on each payment, and
• a small amount of XRP locked as a reserve in each account that holds it.

The host counts that as genuine utility arriving on the ledger. But it means the stablecoin can keep growing for years while XRP trades sideways, and many holders on X are saying exactly that.

Garlinghouse was asked about this at XRP Las Vegas, when an interviewer noted that some people questioned whether RLUSD would replace XRP. He said Ripple does not constantly update the world on its strategy because that would inform competitors, and that some moves might not make obvious sense at first. Even without a direct line from point A to point B, he said, everything is in service of expanding liquidity, utility and trust in XRP. On the same stage he said Ripple is still the largest holder of XRP and the party most interested in its success.

The host’s reading is that this is honest: it may not be a straight line, and the coin may follow the stablecoin’s growth, but possibly more slowly than many holders want. That is his view, not a forecast.

Who earns the interest behind your digital dollar?

Not the holder. The GENIUS Act, signed on July 18 last year, says a company issuing a stablecoin cannot pay you any of the interest on its reserves just for holding the coin.

It nearly went the other way. In a June interview last year, a senator backing the bill said she tended to agree with the industry’s push for interest-bearing accounts, but the votes to pass the bill were not there with that provision in it. It came out.

The banks then went after what was left:

• May 8: six banking groups wrote jointly to the Senate asking for the ban to cover anything that works like interest, saying it could reduce US deposits.
• After the crypto market structure bill failed in the Senate: the head of the Independent Community Bankers of America said on Bloomberg that the group could take credit for ensuring community banks’ voice was heard. On the same show, she said the focus now is making the prohibition on stablecoin yield permanent and “adequate.”
• Last October: Tim Spence, who runs Fifth Third Bank, said on a Federal Reserve stage that the intention of the law was to prevent stablecoins from earning interest, and that if they were allowed to pay it, they could pose a threat equal to or greater than money market funds did when they were introduced.

Garlinghouse, for his part, told the banking lobby last December, when Ripple received its trust bank approval, that its anti-competitive tactics were transparent.

How do large players use stablecoins differently?

The video plays a clip of Ripple’s stablecoin lead describing how institutions use them. Because stablecoins work 24/7, capital markets firms can move money on weekends when banks and exchanges are closed. Some exit tokenized money market funds over the weekend, put the money to work in DeFi (decentralized finance applications on a blockchain), and move it back into a fund afterwards.

The host’s contrast: institutional money keeps working on a Saturday, while many retail holders leave coins idle in an app.

What’s the risk of chasing yield?

The video is equally clear that the first app offering a big number is not the answer. On June 12, 2022, Celsius, one of the biggest crypto lenders, paused all withdrawals, swaps and transfers, citing extreme market conditions. At the time it had around $12 billion in assets under management. Customers who chased its yield could not get their own coins out.

So the video’s message is two-sided: idle coins earn nothing, but handing them to the wrong platform for yield can cost you access to them entirely.

Three questions the video asks every holder

The host suggests a simple check first. Open whatever app or wallet holds your XRP and look at the number of coins, not the price. Compare it with a year ago. For most people, he says, it is the same number, give or take purchases.

Then answer three questions while the market is quiet:

1. Where does your XRP sit? In an app someone else runs, or on keys you control? You should know which.
2. Is it earning anything while you wait, and if so, who holds it while it earns?
3. What would make you add, or take some off, once the stablecoin’s growth does or does not show up in the price? Decide before the headline, not on the day.

What to watch next

• The Fed’s proposed rule. On September 24, the Fed proposed a rule under the stablecoin law for the bank-run issuers it supervises, with 60 days for public comment once published.
• January 18 next year. The GENIUS Act fully takes effect, including the ban on paying holders interest.
• The bank lobby’s push. Watch whether the interest ban is made permanent and extended to exchanges.
• Ripple’s monthly reserve report. It is the simplest public check on RLUSD’s size, alongside how much sits on the XRP Ledger versus Ethereum.