Is XRP a Stablecoin? A Beginner’s Must-Read Guide

What Are Stablecoins and Why Are They Important?

In the crypto market, stablecoins are essential tools for addressing the core issue of price volatility. They are typically pegged to the US dollar or another fiat currency, maintaining a fixed 1:1 exchange rate. For example, holding 1 USDC is theoretically equivalent to holding 1 US dollar in purchasing power.

Stablecoins are widely used in key scenarios, including hedging on exchanges, serving as collateral in DeFi protocols, and facilitating payments and settlements. For users new to the market, stablecoins are often regarded as cash equivalents on the blockchain.

XRP: Fundamental Role and Design Purpose

Ripple did not build XRP for price stability. Instead, XRP was created to increase the efficiency of global fund settlements. As the native asset of the XRP Ledger, XRP is designed as a payment medium with high liquidity, high throughput, and low fees.

From a technical perspective, XRP settles cross-border transactions within seconds. It can process nearly 1,500 transactions per second, significantly surpassing traditional banking systems. However, this technical performance does not ensure price stability. On the contrary, XRP’s price is highly volatile, influenced by market sentiment, regulatory developments, technological advancements, and other factors.

Core Differences Between XRP and Stablecoins

Although XRP is frequently used for payments, its price remains unstable. Stablecoins generally maintain their value within a narrow ±1% range. In contrast, XRP can fluctuate by 5% to 10% in a single day; under extreme market conditions, its price movement may exceed 30%. This volatility fundamentally disqualifies XRP from being categorized as a stablecoin.

Furthermore, stablecoins are usually supported by asset reserves. For instance, USDT is backed by US dollars and other financial assets. XRP lacks a fiat-collateral system, and Ripple has never claimed that XRP would maintain a stable price.

Recent Price Trends and Market Performance

Source: https://www.gate.com/trade/XRP_USDT

In July 2025, XRP was quoted at approximately 3.48 US dollars, with intraday highs reaching 3.55 US dollars. Since the beginning of the year, this represents a gain of over 60%. Analysts indicate that the market is at a critical technical juncture, with potential to test the 5 US dollar and even 7 US dollar levels.

This growth also means that XRP carries significantly higher risk than stablecoins, especially for short-term investors. For those seeking a stable-value asset for risk mitigation, XRP is not appropriate.

Regulatory Developments: GENIUS Act’s Impact on Ripple and XRP

In July 2025, the US Congress passed the GENIUS Act, establishing a formal regulatory framework for stablecoins, including requirements for reserves, transparency, and issuer qualifications. Although XRP itself is not a stablecoin, Ripple is expanding into the stablecoin sector.

Ripple recently introduced RLUSD, a stablecoin pegged to the US dollar. The company plans to integrate RLUSD with both the XRP Ledger and the Ethereum network. This demonstrates Ripple’s efforts to broaden its business scope by leveraging the XRP ecosystem to provide liquidity and settlement support for stablecoins.

Additionally, Ripple is applying for a banking license from the OCC. If successful, Ripple could become a regulated crypto financial institution, which would enhance the legitimacy and broader acceptance of XRP.

How Should Investors Assess the Stability of XRP?

XRP is not a price-stable token. However, its specialization in cross-border payments provides a relatively stable technical and business foundation. Ripple has established extensive partnerships within the financial sector, including central banks and financial institutions. These collaborations have helped XRP gain institutional trust.

Nonetheless, individual investors should be aware that XRP’s price is highly susceptible to market fluctuations. Unlike stablecoins such as USDC or DAI, XRP does not serve as a cash equivalent on the blockchain.

Conclusion

In summary, XRP is not a stablecoin; it is a high-performance digital asset designed for settlement. With Ripple introducing RLUSD and engaging in stablecoin regulatory frameworks, the XRP ecosystem may continue to evolve. For investors, understanding the true role of XRP is more important than pursuing short-term price movements.