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The idea of a stablecoin backed by $XRP is gaining traction in the crypto community.
The proposal comes from Phil Kwok, co-founder of Web3 app builder EasyA. In a series of tweets, he floated the idea of creating a stablecoin collateralized with $XRP.
For context, a stablecoin backed by $XRP means the issuer holds $XRP to support the value of the stablecoin. Kwok suggested that a properly designed stablecoin backed by $XRP could become the “hardest money ever known.”
Kwok clarified that $RLUSD serves a different use case than the one he proposed. Notably, $RLUSD is backed not by $XRP but by cash and U.S. Treasuries. The Ripple stablecoin runs on both the $XRP Ledger and Ethereum, meaning $RLUSD can be minted natively on either network.
Meanwhile, Kwok is proposing a stablecoin with $XRP as part of its collateralization.
Any Crypto-Backed Stablecoin?
In the crypto space, the idea of a crypto-backed stablecoin is not new. The popular $DAI stablecoin by MakerDAO uses Ethereum and other crypto assets as collateral to issue a USD-pegged stablecoin.
Specifically, $DAI is an example of a crypto-backed stablecoin, but it is pegged to USD, not backed by USD itself. Notably, $DAI recently rebranded to Usds (USDS).
$XRP-Backed Stablecoin Already in the Works, Flare Networks Confirms
Hugo Philion, co-founder of Flare Networks, responded to Kwok’s tweets with confirmation and support for the idea. He noted that the Flare team is already developing an $XRP-backed stablecoin.
Yes! It’s already being built on Flare. Delighted to talk with you about it.
— Hugo Philion ☀️ (@HugoPhilion) July 26, 2025
A follow-up from the official Flare X account further reinforced this, outlining how their ecosystem is preparing for such innovations through its FAssets Incentive Program.
The Four Pillars
According to Flare, the $XRP-backed stablecoin initiative aligns with its broader DeFi roadmap, built on a modular DeFi stack and four key verticals:
- DEX Liquidity: Incentives for trading pairs like USDTO and FXRP to ensure deep and healthy markets.
- Lending Protocols: Support for borrowing and lending of both Flare-native and cross-chain assets.
- Collateralized Debt Positions (CDPs): Upcoming support for overcollateralized stablecoins and credit systems leveraging FAssets such as FXRP.
- Yield Derivatives: Protocols designed to enable fixed-income products and yield trading, likely facilitating $XRP yield payouts in future implementations.
Overall, the idea of a stablecoin backed by $XRP with native yield opens a new frontier for the $XRP ecosystem. The asset is traditionally associated with institutional payments and liquidity corridors. However, this development could further expand its role into decentralized finance.