RLUSD Stablecoin Expected to Drive Increased Demand for XRP, Says Axelar Co-Founder

Georgios Vlachos, co-founder of the Axelar platform, believes that the launch of the RLUSD stablecoin will significantly boost demand for XRP in 2025. Axelar, an open-source interoperability platform, facilitates connections between the XRP Ledger (XRPL), the XRPL EVM chain, and over 69 other blockchains, and Vlachos sees the stablecoin as a key driver for XRP's utility in emerging economies.

Stablecoins, particularly those used for remittances and transactions, are gaining traction in many parts of the world. According to Vlachos, the RLUSD stablecoin, which is pegged to the U.S. dollar, will likely see widespread use in such regions. He explained that RLUSD transactions will primarily settle on the XRP Ledger (XRPL) and the XRP-EVM sidechain, which will increase XRP's demand as users pay transaction fees (or "gas") in XRP. This, Vlachos said, will result in XRP being burned with each transaction, benefiting XRP holders and contributing to the overall ecosystem.

"Whenever you conduct those transfers, you pay for gas in XRP," Vlachos told Cointelegraph. "So, the XRP holders are still going to benefit because you burn some XRP every time you do a transaction."

XRP's performance has already been impressive, experiencing a historic rally in November 2024, thanks to political tailwinds and positive developments within the ecosystem. The cryptocurrency surged to a seven-year high of approximately $2.90 on December 3, 2024, before pulling back slightly after the Relative Strength Index (RSI) hit 95, signaling the asset was overbought. Despite this recent pullback, several key factors continue to drive investor interest in XRP as 2025 approaches.

Key Catalysts Driving XRP's Growth

XRP’s price rally was fueled by a combination of factors, with the most notable being the pro-crypto stance of U.S. President-elect Donald Trump. His victory in the November 2024 elections created a favorable outlook for the crypto industry, and investors reacted positively to his promise of a more supportive regulatory environment for digital assets. This political shift, coupled with broader market optimism, contributed to XRP's historic rise in November.

Additionally, XRP has attracted attention from institutional investors. On November 25, WisdomTree, a major asset management firm, filed for an XRP exchange-traded fund (ETF), joining Bitwise, Canary Capital, and 21Shares, which had previously submitted similar applications to the U.S. Securities and Exchange Commission (SEC). The ETF filings have raised expectations of increased institutional investment in XRP.

On December 1, XRP briefly overtook Solana by market capitalization, cementing its place as the fourth-largest cryptocurrency by market cap. According to CoinMarketCap, XRP currently has a market capitalization of around $138 billion, placing it just $2 billion behind Tether (USDT), which has a market cap of approximately $140 billion.

RLUSD Stablecoin and XRP’s Role

Another significant development for XRP is the approval of Ripple's RLUSD stablecoin by the New York Department of Financial Services (NYDFS) on December 10, 2024. The dollar-pegged stablecoin will be overcollateralized by fiat cash reserves and short-term cash equivalents, such as U.S. Treasury bills. RLUSD will be redeemable at a 1:1 ratio with U.S. dollars, and it is expected to further integrate XRP into the growing stablecoin ecosystem.

The combination of RLUSD's launch, Ripple’s ongoing regulatory success, and the increasing demand for XRP in the remittance and transaction sectors is likely to continue driving the digital asset’s growth into 2025. As more users rely on XRP for cost-effective cross-border transfers and as more institutional players show interest in XRP through products like ETFs, the long-term outlook for XRP looks increasingly promising.

As the cryptocurrency market continues to evolve, all eyes will be on how the RLUSD stablecoin and other market catalysts influence the future of XRP and its role in the broader crypto ecosystem.