New stablecoins (RLUSD, USDe): Their advantages and disadvantages

20 May 2025

Stablecoins serve as a bridge between traditional finance (TradFi) and decentralized finance (DeFi). While older stablecoins like USDT and USDC continue to dominate the market, a new generation of stablecoins, including Ripple USD (RLUSD) and Ethena’s synthetic dollar (USDe), are gaining traction by offering novel designs, improved efficiency, and new risk-reward profiles.

This article surveys the characteristics, advantages, and disadvantages of these new stablecoins, and what their emergence could mean for the future of digital finance.

Ripple USD (RLUSD)

RLUSD is a fully backed stablecoin issued by Standard Custody & Trust Company, LLC, a wholly owned subsidiary of Ripple Labs. It is designed to be a dollar-pegged stablecoin, with each RLUSD coin backed by at least an equivalent amount of U.S. dollars and other cash equivalents. This stablecoin emphasizes regulatory compliance and integration with existing financial institutions.

Coin Name	Ripple USD
Coin Symbol	RLUSD
USD Price	$1.00
Market Cap	$316.94M
24h Trading Volume	$99.9M
Circulating Supply	317.04M RLUSD
Total Supply	317.04M RLUSD

Data from CoinMarketCap on May 14, 2025.

Ethena’s synthetic dollar (USDe)

USDe is issued by Ethena Labs and represents a synthetic stablecoin, meaning it is not backed directly by USD reserves. Instead, it uses a combination of ETH staking derivatives (e.g., stETH) and short perpetual futures contracts to maintain its peg, aiming for capital efficiency and yield generation.

Coin Name	Ethena USDe
Coin Symbol	USDe
USD Price	$1.00
Market Cap	$4.8B
24h Trading Volume	$4.8B
Circulating Supply	4.8B USDe
Total Supply	4.8B USDe

Data from CoinMarketCap on May 14, 2025.

Advantages of new stablecoins

Improved capital efficiency

USDe uses delta-neutral strategies (staking + shorting) to maintain a dollar peg without requiring full USD collateral. This approach potentially reduces the amount of idle capital needed, allowing for greater liquidity efficiency. This model may also deliver organic yield (like Ethena’s “sUSDe”), which appeals to yield-seeking users.

Enhanced regulatory compliance

RLUSD is issued by a registered financial entity (Standard Custody & Trust Company, LLC) and regulated by the New York Department of Financial Services (NYDFS), which increases its credibility among institutional users. Such regulatory adherence can improve access to traditional financial markets and bolster mainstream adoption.

Diversification of stablecoin models

The rise of synthetics like USDe reduces the ecosystem’s dependency on fiat-backed models. Diversified mechanisms can improve the resilience of the stablecoin sector, especially during bank runs or regulatory crackdowns.

DeFi integration and yield opportunities

USDe and its yield-bearing variant, sUSDe, are being aggressively integrated into DeFi platforms, offering liquidity incentives and staking yields. RLUSD, backed by PayPal’s infrastructure, could eventually facilitate faster, cheaper payments and remittances, particularly across PayPal's global user base.

Disadvantages and risks

Complexity and transparency concerns

USDe’s model involves derivatives, which can be complex and opaque for average users. Maintaining the peg depends on sophisticated trading strategies, which introduce operational risk. Any failure in execution (e.g., liquidation risk during market volatility) could lead to depegging events.

Counterparty and custodial risk

While regulated, RLUSD is custodial and centralized. It inherits the risks of traditional finance, such as potential freezes, censorship, or compliance with government directives. USDe also carries custodial exposure to exchanges and derivative platforms on which it relies for its hedging strategy.

Regulatory uncertainty

USDe’s synthetic model may attract regulatory scrutiny similar to what algorithmic stablecoins (like TerraUSD) faced, even though it is delta-neutral rather than algorithmic. RLUSD’s integration with payment systems could also face regulatory roadblocks, especially in jurisdictions wary of privately issued digital dollars.

4. Market adoption and liquidity

Despite innovative mechanisms, newer stablecoins often suffer from lower liquidity and limited adoption compared to incumbents like USDT and USDC. DeFi platforms may hesitate to accept them as collateral without significant usage and demonstrated stability.

Comparison Table: RLUSD vs USDe

Feature	RLUSD	USDe (Ethena)
Type	Fiat-backed	Synthetic (staking + shorting)
Issuer	Standard Custody & Trust Company, LLC	Ethena Labs
Regulation	NYDFS Regulated	Unregulated (as of now)
Yield	No native yield	Yes (via sUSDe)
Risk model	Low (custodial)	Medium to high (trading strategy risk)
Use case focus	Payments, institutional	DeFi, yield generation
Transparency	High (regulated)	Medium (strategy-driven)

Conclusion

The emergence of RLUSD, USDe, and other new stablecoins signals a broadening of the stablecoin landscape. Each design has trade-offs: RLUSD prioritizes regulatory clarity and stability, while USDe emphasizes innovation and capital efficiency.

As users and developers increasingly seek alternatives to traditional fiat-backed coins, these new models will play a crucial role in shaping the next phase of decentralized finance. However, users must carefully weigh the security, regulatory, and systemic risks before adopting them at scale.

FAQs

What are the key advantages of new cryptocurrencies such as RLUSD and USDe?

New stablecoins like RLUSD and USDe offer distinct advantages in innovation and efficiency. RLUSD emphasizes regulatory compliance and integration with traditional payment platforms, making it appealing for mainstream use. USDe introduces a synthetic model that combines crypto staking and derivatives to generate yield while maintaining a stable value. These models aim to improve capital efficiency and transparency and expand utility in payments and DeFi.

Will older cryptocurrencies like USDT and USDC be discontinued soon?

There are currently no indications that USDT or USDC will be discontinued in the near future. These stablecoins continue to dominate the market due to their liquidity, adoption, and strong infrastructure. While regulatory scrutiny is increasing, both issuers have taken steps to enhance transparency and compliance. Newer stablecoins are likely to coexist with established ones, offering users more diverse options.

Should I add stablecoins to my investment portfolio?

Stablecoins can be helpful to a diversified crypto portfolio, particularly for managing volatility and earning passive income through staking or DeFi protocols. They are designed to maintain a stable value, often pegged to fiat currencies like the U.S. dollar, which helps preserve capital during market downturns. However, assessing the type of stablecoin, its backing model, and any associated risks is important. As with all investments, understanding the underlying mechanics and platform trustworthiness is essential.

Can I acquire RLUSD or USDe on LetsExchange?

As of May 14, 2025, neither RLUSD nor USDe was listed on LetsExchange.io. These crypto assets might soon be available for trades on our platform. In the meantime, users can swap other stablecoins, such as USDT and USDC, for thousands of coins and tokens through our user-friendly widget.

Disclaimer

Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.