RLUSD's Use Case in the Hidden Road Setup Has Triggered Concerns Among XRP Proponents, Questioning the Coin's Role in the Deal

Ripple's latest blog post about RLUSD's use case in the Hidden Road setup has triggered concerns among XRP proponents, questioning the coin's role in the deal.

Recent attention to RelativeLUSD (RLUSD) in a Hidden Road use case has sparked discussion among XRP enthusiasts about the token's role in the deal.

Earlier this week, Ripple shed light on the crucial role of stablecoins in connecting decentralized finance (DeFi) and traditional finance (TradFi). This was highlighted in a recent blog post by Ripple.

Revealing Hidden Road’s Plans to Use RelativeLUSD and XRPL for Post-Trade Activities

The post further illuminated how RelativeLUSD would be utilized by Hidden Road, which Ripple is acquiring for $1.25 billion. As part of the deal, Hidden Road would transition its post-trade activities onto the XRP Ledger (XRPL), aiming to reduce costs. With the ledger handling these trades, Hidden Road would use XRP for paying all post-trade transaction fees.

This was disclosed by Ripple in April when announcing the acquisition of the prime broker, which clears over $3 trillion for 300 financial institutions annually. A large part of the deal would see Hidden Road transition its post-trade activities onto XRPL to become more cost-efficient.

With XRPL managing Hidden Road’s post-trades, the prime broker would leverage XRP to pay all post-trade transaction fees.

The crypto community had raised concerns after the company announced the acquisition of Hidden Road in April. A community member expressed these worries.

suggesting that the role of XRP in the Hidden Road setup was being downplayed. It seems these concerns have resurfaced with Ripple now stating that Hidden Road will use RelativeLUSD as a collateral asset across its platform. Several users on social media are now questioning the role of XRP in the deal.

suggesting that the main function of XRP would be for paying transaction fees.

Earlier this month, a crypto community member, Elena Schoen, touched upon the utility of RelativeLUSD in cross-border settlements and multi-fiat onboarding. She also noted that XRP is used for settling transactions on the XRP Ledger.

According to her, XRP was once the preferred bridge asset on XRPL. However, she suggested that the coin is gradually losing its relevance, as she claims RelativeLUSD is becoming more recognized.

For instance, earlier this year, Brad Garlinghouse said RelativeLUSD and XRP would complement each other. He stated that both have different functions.

According to the CEO, XRP functions as a bridge asset to provide liquidity between two fiat currencies. On the other hand, RelativeLUSD serves as an on-chain fiat.

In April, David Schwartz, the CTO of Ripple, stated that RelativeLUSD is good for XRP. According to him, stablecoins like RelativeLUSD are crucial in maintaining price stability. The Ripple CTO also mentioned that XRP would continue to render key functions like auto-bridging that favor its liquidity.