Ripple CTO Explains Crucial RLUSD Stablecoin Feature

In a recent X conversation, Ripple CTO David Schwartz shed light on a key feature of Ripple stablecoin, RLUSD.

The conversation began when XRP enthusiast and legal expert Jeremy Hogan shared his thoughts on the newly proposed stablecoin bill. Hogan concluded his discourse with the question of whether “Ripple or Circle actually freeze RLUSD or USDC once it’s transferred. I didn’t think that was possible for either.”

An X user who joined the discourse directed this question to Schwartz, asking him to shed further light on the matter.

In response to the user’s inquiry on X, Schwartz stated that RLUSD stablecoin can be frozen or “clawed back,” explaining why this was essential: “RLUSD can be frozen or clawed back. This is necessary because we want balances on the ledger to accurately reflect legal obligations of the issuer, and off-ledger activity, such as court orders, can make those legal obligations go away or change.”

RLUSD can be frozen or clawed back. This is necessary because we want balances on the ledger to accurately reflect legal obligations of the issuer and off-ledger activity, such as court orders, can make those legal obligations go away or change.

— David “JoelKatz” Schwartz (@JoelKatz) March 12, 2025

Vet, an XRPL dunl validator, contributed to the conversation, adding that “RLUSD can be frozen and clawbacked on both Ethereum and the XRP Ledger if the issuer, Ripple, is requested by law enforcement or court orders to do so,” in line with what the Ripple CTO explained.

More on “clawback”

Tokens with clawback functionality allow the issuer to reclaim them from users’ wallets under specific conditions. This feature is often used to ensure regulatory compliance, recover assets in the event of fraud or criminal activity or when tokens are sent to undesired addresses.

In late January, a clawback amendment was enabled on the XRP Ledger after gaining about 90% approval. The “AMMClawback” amendment enables an issuer to claw back tokens put in an AMM if the clawback feature is enabled. It also modified the “AMMDeposit transaction type” to prevent frozen tokens from being deposited into the AMM.

This amendment enabled Ripple’s RLUSD stablecoin to be traded directly on the XRP Ledger’s decentralized exchange (DEX).

In separate news, the XRP Ledger has been integrated into RWA.xyz, an analytics platform for RWA tokenization. Users may gain real-time insights across a variety of tokenized assets and blockchain activity, including U.S. tokenized treasuries and RLUSD stablecoin data.

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