XRP plunged 27%, RLUSD exceeded US$2.3 billion, but the market remained calm

Ripple's stablecoins have surged 1,278% this year, while XRP has lost more than a quarter of its market value.

Although online activity has reached a record high, the tokens that capture this activity carry the anchor attributes of a dollar sign and a fixed exchange rate. The total market capital of RLUSD has reached US$2.32 billion, and the cumulative trading volume has exceeded US$9 billion. The year-to-date increase is as high as 1,278%; at the same time, XRP fell by 27% during the same period, and the trading price hovers around US$1.39.

XRP ledgers process 2.4 million transactions per day, a year-on-year increase of 21%, and decentralized exchange (DEX) transaction volume surged by 79%. However, the number of active accounts fell by 40%, indicating a decrease in the number of participants but a significant increase in the size of individual transactions. The seven spot XRP ETFs approved in March 2026 have attracted cumulative inflows of US$1.68 billion, contributing US$153 million to US$159 million in August alone, setting the best monthly performance since their launch.

Currently, the supply of RLUSD on XRPL has jumped from 18.4% of total issuance at the beginning of 2026 to 58.9% today. Of this,$963 million exists on XRPL and another $1.1 billion exists on the Ethereum network. The vast majority of institutional integration plans, including JPMorgan Chase, MasterCard, Conva and Interactive Brokers, choose to use RLUSD for settlement rather than XRP. This raises the question of whether the token is gradually becoming a "by-product" of its own ecosystem.

Contradictory narratives behind the data

Numbers tell two contradictory stories about the same network. XRP started at around $1.90 in early 2026, then slipped to a July low of $1.06, rebounded to $1.55 in August, and then fell back to $1.36. It fell 27% for the whole year. This trend tends to cause retail traders to close their apps and come back to check them six months later.

But behind falling prices, infrastructure has had its best year yet. The XRP ledger handles more transactions than at any time since the 2021 bull market. Only seven months after its establishment, RLUSD has ranked among the top ten stablecoins in the world. Ripple has signed a cooperation agreement with payment processors that process $190 billion in payment traffic every year. The Bank for International Settlements (BIS) also published a working paper using XRP ledgers to prove the integrity of encrypted data.

None of this drives up the token price. This contradiction is the key worthy of in-depth analysis, because it reveals a fact that the community has been reluctant to face: the success of the network and the performance of tokens may no longer belong to the same story.

The stablecoin that devours the narrative

RLUSD was launched as a compliance-first stablecoin at the end of 2025, designed to integrate into existing banking infrastructure. Ripple positioned it as the settlement layer for cross-border payments, which is exactly the use scenario that XRP should have occupied. The company has claimed the two assets are complementary, but seven months of market data suggest this is not the case.

The growth curve speaks for itself. RLUSD exceeded the market value of US$1 billion in the spring, reached US$2 billion on August 25, and is currently US$2.32 billion. The cumulative transaction volume has exceeded US$9 billion. A year-to-date growth rate of 1,278% would dominate the headlines of cryptocurrencies if it belonged to a speculative token. But as a stablecoin anchored to the U.S. dollar, it cannot inspire the same excitement, even if it quietly absorbs the utility that once justified XRP.

The listing trajectory tells another story. Binan added RLUSD in January 2026, OKX followed up on April 29, and Gate.io joined on June 15. The currency is now available on South Korea's four major exchanges (Upbit, Bithumb, Coinone and Korbit). This was not limited to niche products in the Ripple partner network, but achieved mass distribution in all major trading areas in less than a year.

What is more revealing is the distribution of supply. At the beginning of 2026, only 18.4% of RLUSD existed on the XRP ledger, with the rest on Ethereum. Today, this ratio has reversed to 58.9%, of which $963 million is on XRPL and $1.1 billion is on Ethereum. stablecoins are migrating to the main chain of XRP at an accelerating rate, which means that the growing transaction volume of books is increasingly denominated in U.S. dollars rather than XRP. Every casting on XRPL is a vote of confidence in the chain and an indifferent vote on the token.

Institutional script to bypass XRP

When JPMorgan used Ripple infrastructure to run its treasury clearing, it chose RLUSD as a cash leg rather than XRP. This decision summarizes the logic of the entire organization in one sentence.

This pattern is repeated in all major transactions signed by Ripple in 2026. Conva, a payment company that handles US$190 billion in cross-border traffic every year, integrates RLUSD for its corridor settlement. LMAX Digital has signed a $150 million deal to bring RLUSD to its institutional trading infrastructure. MasterCard connects through Ripple's payment API. BlackRock's BUIDL fund interacts with the Ripple ecosystem through the RLUSD track. Flutterwave, which just completed a $3.2 billion Series E round, is collaborating on developing the African Payments Corridor, where dollar-denominated settlements reduce friction among remittance senders. Interactive Brokers and B2C2 have added RLUSD support to their institutional customer base.

Count these names: JPMorgan Chase, MasterCard, BlackRock, Conva. These are not speculative encryption games. They are the largest financial institutions on earth, and each has chosen stablecoins over tokens. The reasons are not complicated. Bank trading desks that manage overnight positions in multiple currencies do not want to hold assets that fall 27% in eight months. Tokens anchored to the U.S. dollar completely eliminate volatility risk. The list of institutions Ripple signed up is indeed eye-catching, but the march is heading towards RLUSD, and XRP can only wait and see from the roadside.

This is not a conspiracy or a strategic failure. This is the foreseeable result of building a stablecoin that does the same job but has no price risk. Ripple has created a better product for the same customer it has spent ten years pursuing. The irony is strong enough to cut it off.

Review Ripple's recommendation to banks between 2015 and 2023: use XRP as a bridge asset and settle in three seconds, saving corridor costs by 40% to 70% compared to SWIFT. Banks listened politely and mostly refused. Volatility objections run through every conference room. Now Ripple walks into the same conference room with RLUSD, which provides the same three-second settlement and the same cost savings on the same ledger, only removing volatility. The bank is signing up. The product-market fit that has plagued XRP for a decade came when Ripple removed the token from the equation.

Fewer, bigger hands

Here's a number that no one talks about. Active accounts on the XRP ledger decreased by 40% year-on-year. At the same time, daily transactions rose 21% to 2.4 million, and DEX transaction volume surged 79%.

Combine these three data points. Fewer wallets, more transactions, and the average transaction volume per wallet has increased significantly. The network is concentrated in the hands of fewer participants, and the amount of money each of them moves has increased significantly.

This is the "fewer, bigger hand" paradox, which reconstructs the entire XRP story. Retail traders-those who drove the rebound in 2017 and the echo in 2021-are leaving. The 40% decline in active accounts is not a rounding error or seasonal deviation. It was a structural shift that lasted for several months. Buyers hoping for $10 in XRP have left, or at least are dormant, their wallets idle, and the network they once championed is being rewired around institutional traffic.

Who replaced them? Are institutional players who route payments through RLUSD in high-throughput corridors. Market manufacturers that populate their order books with larger individual transactions generate the same transaction volume from a small number of accounts. Treasury operations that do not require thousands of wallets because they consolidate traffic into a few accounts with API-driven execution and bulk clearing. The ledger has not become quieter, but more efficient, to put it mildly, more institutional and less retail.

This is important because XRP prices have historically been a retail phenomenon. Institutions do not buy XRP to hold it. They use it as a bridge asset that takes only seconds to come in and out, which creates trading volume but does not create sustained buying pressure. The market value of tokens is based on the belief that retail holders and institutional utilities will eventually converge, and that network effects will be large enough to permanently increase the price bottom line.

Instead, institutions found a way to use the Internet without using tokens, and when prices stopped matching, retail investors left. Convergence theory collapsed not because it was theoretically wrong, but because RLUSD provided institutions with a better path that did not require XRP exposure. When the bridge itself could natively carry dollars, bridge assets became optional.

No competitor has published this analysis. The bullish XRP content focuses on ETF inflows and partnership announcements. The bearish content points to falling prices and dilution of custody. Neither side linked account data to RLUSD migration to explain the structural changes that actually occurred on the ledger.

The ETF Paradox

Contrary to all this, the spot XRP ETF is going through a quietly strong year. Seven funds were launched after receiving SEC approval in March 2026, attracting a cumulative inflow of US$1.68 billion. August was the best month, with net new funding of US$153 million to US$159 million.

This is the real funds that go into the real custody wallet and are managed by the fund manager with real fiduciary obligations. This verifies XRP's status as an investable asset class in the eyes of traditional finance. But this is only a small fraction of the money Bitcoin and Ethereum ETFs have attracted in the first six months, suggesting that there is a cap on the market's appetite for XRP exposure that the community is not yet fully aware of. More importantly, it creates its own paradox. ETF buyers accumulate XRP by removing it from active circulation. They don't send XRP across borders. They don't provide liquidity on DEX. They do not participate in the growing transaction volume of the network. They bought a price chart that was unfavorable throughout the year, storing the tokens in a cold storage vault while the chain underneath operated on another asset.

ETF inflows failed to translate into continued price increases as buying pressure on funds was offset by selling pressure from custody unlocks and the overall market's apathy to the fundamental story of XRP. On September 1, Ripple unlocked three escrow batches totaling 1 billion XRPs: 100 million, 400 million and 500 million tokens. The remaining custody holds 32.6 billion XRPs and releases 1 billion tokens per month. This is a monthly supply expansion that institutional ETF buyers cannot absorb at current traffic rates, especially when use cases that institutions care about are now running on RLUSD.

The structural imbalance between inflows and outflows is the ETF story concealed by the headline numbers. One billion XRPs at a price of $1.39 equals potential monthly selling pressure of approximately $1.39 billion. ETF inflows of $159 million in August accounted for only 11.4% of that figure. Even assuming Ripple re-locks most of its monthly unlocks, the escrow mechanism will create lasting selling pressure, which is not conducive to price increases.

ETF proves that financial products can exist around XRP. But they do not prove that XRP must appreciate for the Ripple ecosystem to succeed. The difference is the quiet earthquake at the center of the story.

Regulatory clarity comes, but prices remain indifferent

The SEC case has been resolved. Japan's Financial Services Agency (FSA) approved RLUSD on June 25. The European Union granted MiCA preliminary authorization in Luxembourg on June 23. BIS published a working paper using XRP ledgers to prove the integrity of encrypted data.

Two years ago, any of these headlines would have sent XRP up 30% in a day. All of this happened in 2026, while XRP fell 27% for the year.

The obvious explanation is that regulatory clarity has been priced. The market has been objectionable for more than a year. The less obvious explanation is more important: regulatory clarity benefits RLUSD more than XRP. Stable coins require regulatory approval to operate as payment instruments in specific jurisdictions. Speculative tokens require regulatory approval to avoid being removed. The same event has different meanings for different assets, and the market figured this out faster than the community.

Japan's FSA approval puts RLUSD into the third-largest economy by GDP, a market where dollar-denominated stablecoin settlements can replace expensive yen convertibility in cross-border flows. The MiCA authorization covers the entire European Economic Area, giving RLUSD legal status as an electronic currency token in 30 countries. These are not theoretical markets. These are the jurisdictions where RLUSD can now legally serve as a settlement currency for banks and payment processors.

XRP was already traded in these markets before these approvals came into effect. Japanese Retail investors have been one of the largest XRP holders since 2017. European exchanges listed XRP years ago. These approvals did not change the accessibility of XRP, but completely changed the commercial viability of RLUSD as a regulated payment instrument. Each regulatory victory expands the target market of stablecoins with little impact on the status quo of the tokens. The community celebrates every headline as an XRP catalyst. The market prices every news item as an RLUSD catalyst. The price chart resolved the controversy.

Self-cannibalization theory

Put bluntly. RLUSD is eating into XRP's primary usage scenarios, and Ripple is doing it.

This is not accidental. Ripple spent years arguing that the volatility of XRP is a feature, and that a three-second settlement window means that price fluctuations during transmission are negligible. This argument is valid when the competitor is SWIFT, which takes days and charges 3% to 7% corridor fees. But it doesn't work when the competitor is RLUSD, which settles in the same three seconds on the same ledger, with zero price risk and lower integration complexity.

Payment processors choose stablecoins every time they choose a bridge asset that has fallen 27% this year and a stablecoin anchored to the U.S. dollar. Not because XRP is broken, but because stablecoins eliminate a type of risk that speed cannot compensate. Conditions exist for XRP to recover, but they need something beyond Ripple's core payments business to drive demand.

The current bull market case for XRP is based on three pillars that have nothing to do with cross-border payments. First, speculative demand driven by ETF flows and the re-entry of retail investors during the next broad market rebound. Second, DEX activity on the XRP ledger creates an organic demand for XRP as a basic transaction pair, a feature that has grown with the development of DeFi on the chain. Third, the reduction of combustion mechanisms and custody gradually tightened supply over many years, ultimately making monthly unlocks negligible relative to circulating supply.

None of these pillars requires RLUSD to fail. They coexist. But it also means that XRP's investment arguments have quietly shifted from "utility tokens for global payments" to "speculative assets on the chain of settling stablecoin payments." Even if prices eventually recover, this is a narrative downgrade. The difference between owning a toll bridge and owning a house near the toll bridge. Traffic is still passing by. Economics is completely different.

Ripple gains what, XRP holders lose what

Ripple is having an excellent year in terms of private enterprise measures. RLUSD generates revenue through casting and redemption fees. Institutional partnerships create recurring payment flows that compound interest over time. Regulatory approvals open up new markets in every jurisdiction. The Ripple ecosystem, measured by transaction throughput, number of partners and stablecoin adoption, has never been stronger.

XRP holders do not automatically benefit from it. Ripple holds billions of XRPs in custody, and the company's success does not create a direct mechanism for XRPs to appreciate. There is no revenue share. There is no repurchase plan. There is no on-chain fee allocation. The community has always assumed a link between Ripple's business performance and XRP's market price, but has never been formally established. Data for 2026 suggests that the connection is weaker than the community believes.

This is the uncomfortable truth revealed by the "fewer, bigger hands" data. The XRP ledger is becoming an institutional payment channel denominated in RLUSD. Tokens given a ledger name become less and less relevant to the main functions of the ledger as each one chooses a stablecoin instead of a token integrates. The Internet can prosper while tokens are stagnant, and 2026 is the first year when these two events occur simultaneously and are measurable.

This does not mean that XRP is zeroed. Many tokens are traded under narratives that are decoupled from their network's primary utility, and some of them perform very well over multi-year cycles. But this means that the token needs a catalyst that is independent of Ripple's payments business. Expansion of smart contract capabilities on ledgers may attract DeFi protocols that require XRP as gas fees and collateral. The DeFi ecosystem built on XRPL can generate organic trading demand through the AMM pool and lending market, thereby exerting continuous buying pressure on tokens. Alternatively, supply shocks driven by continued ETF accumulation combined with custody reductions could tighten floating supplies and drive prices even without fundamental use case changes.

There must be something that creates demand specifically for XRP, not for general XRP ledgers. Until this distinction narrows, the huge disconnect will persist. And the longer RLUSD grows and XRP stagnates each month, the harder this distinction becomes to narrow, as it proves to the next institutional potential customer that the ledger can function perfectly without tokens.

Points to Focus

• RLUSD monthly casting rate and XRP escrow unlocking: If new RLUSD issuance continues to exceed the dollar value of monthly escrow releases, stablecoins will grow faster than token supply. This ratio tells you which asset the market chooses in real time.
• The trend of active accounts reverses: The 40% decline in active accounts is the clearest signal that retail investors are leaving. Two consecutive months of continuous increases will indicate that fresh participants are entering the network, not just existing institutions adding wallets.
• XRP ETF flow accelerates: August's $153 million to $159 million, while strong, was not enough to offset custody selling pressure at current prices. Monthly inflows of more than $250 million begin to have an impact on prices.
• Composition of DEX transaction volume: A 79% surge in DEX transaction volume is good for online activity, but tracking how much of it is denominated in XRP or RLUSD will reveal whether tokens or stablecoins are driving the growth of on-chain transactions.
• Institutional clearing currency disclosure: When the next major bank or payment processor announces Ripple integration, observe whether the press release is named RLUSD, XRP, or both. This language is the clearest forward-looking indicator of which assets an institution chooses to build.

FAQs

What is the current price of XRP?

As of early September 2026, XRP was trading at approximately US$1.39, down approximately 27% from its January high near US$1.90. The token hit an intra-year low of $1.06 in July, then rebounded to $1.55 in August, before pulling back again.

What is RLUSD and how large is it?

RLUSD is a dollar-linked stablecoin launched by Ripple at the end of 2025. Its market value has reached US$2.32 billion, and its cumulative transaction volume has exceeded US$9 billion, a year-to-date increase of 1,278%. It is listed on Binance, OKX, Gate.io and all four major Korean exchanges.

Why is the network growing and XRP falling?

The growing activity of XRP ledgers is increasingly driven by RLUSD settlement and institutional payment traffic that uses stablecoins rather than XRP as a value transfer layer. Network utility and token prices have been decoupled because utilities do not require tokens.

How many spot XRP ETFs are there?

Seven spot XRP ETFs were launched after receiving SEC approval in March 2026. They attracted cumulative inflows of US$1.68 billion, with US$153 million to US$159 million in August, the strongest monthly performance since the launch.

Is RLUSD replacing XRP for payments?

Institutional consolidations in 2026, including JPMorgan Chase, Conva, MasterCard and Interactive Brokers, have used RLUSD for settlement. Banks and payment processors prefer assets anchored in the U.S. dollar rather than taking on 27% annual retracement of tokens to get the same three-second settlement speed.

How many XRPs are still in custody?

Ripple holds 32.6 billion XRPs in custody and unlocks 1 billion tokens every month. On September 1, three batches of 100 million, 400 million and 500 million XRPs were released. Custody creates continued monthly selling pressure.

Why did regulatory victories not boost XRP prices?

The SEC decision, Japan's FSA approval of RLUSD and the EU MiCA authorization were largely priced by XRP before they occurred. More importantly, these events have disproportionately benefited RLUSD because they have opened up new jurisdictions for regulated stablecoin use while making little change to existing market access for XRP.

Should I purchase XRP based on this analysis?

This article examines the structural relationship between XRP price movements and RLUSD adoption. Individual investment decisions depend on an individual's risk tolerance, time horizon and financial situation. This is educational analysis, not investment advice.

Disclaimer: This article is for informational and educational purposes only. Does not constitute financial, investment or trading advice. There are significant risks in the cryptocurrency market. Before making an investment decision, be sure to study it yourself. Published on September 9, 2026.