Ripple CTO Emeritus Explains RLUSD Use Case, Freeze and Clawback Feature

TL;DR

Ripple CTO Emeritus David Schwartz discusses the utility of RLUSD as a stablecoin, stating it can serve as a bridge but is not neutral due to its ties to Ripple and the U.S. legal system.

Key points

David Schwartz discusses RLUSD's utility as a stablecoin
RLUSD can serve as a bridge but is not neutral
RLUSD is tied to Ripple and the U.S. legal system
XRP is a decentralized bridge asset for value transfer
RLUSD aims to bring price stability to Ripple's payment solutions

Mentioned in this story

RippleDavid Schwartz

RLUSD

In a recent tweet, Ripple CTO Emeritus David Schwartz highlights Ripple USD stablecoin's utility in settlement in response to a user who asked if RLUSD can be a neutral bridge as XRP does.

Schwartz didn't give a direct answer, replying "Yes and No" and went on to explain his perspective. According to the Ripple CTO Emeritus, RLUSD can be used as a bridge, but it is not a neutral one because it is tied to Ripple, which can freeze it and claw it back, and to the United States (whose courts can order Ripple to do things).

Yes and no. RLUSD can be used as a bridge, but it's not neutral because it's tied to Ripple (who can freeze it and claw it back) and to the United States (whose courts can order Ripple to do things).

— David 'JoelKatz' Schwartz (@JoelKatz) April 21, 2026

XRP represents a neutral, decentralized bridge asset intended for value transfer. RLUSD, on the other hand, is a fiat-pegged stablecoin intended to bring price stability to Ripple's growing payment solutions.

While RLUSD is seeing increasing use cases as a payment and settlement instrument, it also deepens XRP's role as the bridge asset in these flows.

RLUSD allows institutions to facilitate instant settlement of cross-border payments, access liquidity for remittance and treasury operations, integrate with decentralized finance (DeFi) protocols, and reliably bridge between traditional fiat currencies and the crypto ecosystem.

RLUSD is fully integrated into Ripple Payments, allowing Ripple to utilize it to facilitate global payments on behalf of its enterprise customers.

Freeze and clawback features

The freeze feature mentioned by the Ripple CTO emeritus lets token issuers prevent misuse by frozen account holders. It ensures that flagged addresses cannot send or receive tokens until their trust line is unfrozen, allowing issuers to comply with sanctions and other regulatory requirements.

Clawback allows an issuer to reclaim tokens from users' wallets under certain conditions.

Q&A

What is RLUSD and how does it relate to XRP?

RLUSD is a fiat-pegged stablecoin designed for payment solutions, while XRP serves as a neutral, decentralized bridge asset for value transfer.

Why is RLUSD not considered a neutral bridge like XRP?

RLUSD is not neutral because it is controlled by Ripple, which can freeze or claw back transactions, and is subject to U.S. court orders.

What are the implications of Ripple being able to freeze RLUSD?

The ability for Ripple to freeze RLUSD transactions raises concerns about its reliability and neutrality as a payment instrument in financial settlements.