Can Stablecoins Replace XRP? Experts Clarify Their Role in Digital Finance.

A recent post from Britto, a community dedicated to Arthur Britto, co-creator of XRP Ledger (XRPL), provides a detailed explanation of the different roles of XRP and stablecoins in the digital financial ecosystem. Through a simple comparison, this post aims to correct misconceptions about XRP being replaced by stablecoins.

Misunderstanding the functions of XRP and Stablecoin The Twitter post refers to a common statement: that stablecoins are replacing XRP. According to Britto, this view misunderstands the fundamental purpose of each asset. Comparing this situation to confusing an application with the infrastructure that the application runs on, Britto shapes XRP as the fundamental connector — "bridge currency" — in contrast to stablecoins, which are described as digital versions of fiat currencies like the US dollar or euro. Britto describes XRP as an "international translator" capable of facilitating cross-border transactions by allowing interoperability between different currencies. In contrast, stablecoins are described as static value stores, useful for holding but not designed to move value between systems. This distinction underpins the rest of the post, exploring the practical differences between the two assets. Practical application: XRP in cross-border transactions To illustrate his point, Britto outlines a hypothetical scenario. A bank in Japan wants to send $10 million to Mexico. Using stablecoins like USDC would require identifying liquidity partners, handling foreign exchange fees (FX), and navigating compliance processes — all of which create obstacles and complexities. In contrast, Britto presents XRP, specifically when used through Ripple's On-Demand Liquidity product (ODL), as a more reasonable option. The transaction will automatically convert yen to XRP and then to Mexican pesos, all without the need for a pre-funded account or multiple intermediaries. According to the post, this demonstrates the core utility of XRP as a bridge asset: the ability to move value efficiently across borders in real-time. Liquidity and decentralization: The main differences Britto emphasized that liquidity — the ability to convert assets quickly and at low cost — is more important than stability in cross-border transfers. Although stablecoins may provide low volatility, the demand for local liquidity pairs and centralized oversight makes them less effective in global value transfer scenarios. In contrast, XRP is described as providing on-demand liquidity through a decentralized system with lower counterparty risk. According to Britto, this decentralization adds an extra layer of trust. Stablecoins still rely on centralized issuers and may be subject to restrictions such as freezing or blacklisting. XRP, as part of XRPL, is not controlled by a central authority, providing a more reliable alternative for moving value globally. Ripple's multi-asset strategy and final conclusion The post also clarifies Ripple's broader strategic direction. The launch of Ripple's dollar-backed stablecoin, RLUSD, is not positioned as a competitor to XRP but as a complementary tool in its expanding financial product suite. Britto likens this to adding a screwdriver to a toolbox with a hammer, emphasizing that different assets serve different functions in a financial network. Britto reinforces the message that XRP and stablecoins cannot replace each other. Stablecoins are built for stability and storage; XRP is built for speed and transfer. Each has its own place, and neither can replace the other. The post concludes by dismissing binary thinking in financial innovation, asserting that the future of digital finance depends on applying the right tools for the specific tasks at hand.