XRP is a digital asset designed for one specific purpose: making cross-border payments faster, cheaper, and more efficient than the traditional banking system. While Bitcoin was built to be digital money and Ethereum was built to be a programmable computer, XRP was built to be a bridge and a tool that lets banks and payment providers move value between currencies in seconds instead of days.
It runs on the XRP Ledger, a blockchain that has been operating since 2012. In 2026, XRP is the fourth largest cryptocurrency by market cap, has survived a five-year legal battle with the U.S. Securities and Exchange Commission, launched its own stablecoin, and is being used by over 300 financial institutions across 45 countries.
Who created XRP and why
XRP was created by Jed McCaleb, Arthur Britto, and David Schwartz, and was later developed by the company they co-founded: Ripple Labs. The XRP Ledger launched in 2012 three years after Bitcoin, but with a fundamentally different philosophy.
Where Bitcoin was built as an alternative to the traditional financial system, XRP was built to work within it. Ripple’s vision was to replace SWIFT which is the messaging network banks use for international transfers, with something faster, cheaper, and more transparent. A SWIFT transfer typically takes 3–5 business days and passes through multiple correspondent banks, each taking a fee. An XRP transaction settles in 3–5 seconds and costs a fraction of a cent.
Ripple Labs, the company behind XRP, has always been a private company with institutional ambitions. This is fundamentally different from Bitcoin, which has no company behind it, or Ethereum, where the Ethereum Foundation plays a background role. Ripple actively sells its technology to banks and financial institutions, and XRP is the liquidity layer that makes that technology work at scale.
How XRP works
The XRP Ledger uses a consensus mechanism called the Ripple Protocol Consensus Algorithm (RPCA), which is fundamentally different from Bitcoin’s Proof of Work or Ethereum’s Proof of Stake. Instead of miners or stakers competing to validate transactions, a network of trusted validators, including universities, financial institutions, and independent operators, reach agreement on the state of the ledger through a consensus process that completes in seconds.
This design makes XRP extremely fast and energy-efficient. The XRP Ledger processes up to 1,500 transactions per second, settles in 3–5 seconds, and has a median transaction fee of approximately $0.0002. By comparison, a Bitcoin transaction takes roughly 10 minutes to confirm and costs several dollars in fees during periods of high demand.
XRP’s core use case is as a bridge currency. When a bank in the U.S. wants to send $1 million to a bank in Japan, traditionally it needs to either hold a large amount of yen in a pre-funded account or route the payment through multiple correspondent banks. With XRP’s On-Demand Liquidity (ODL) system, the U.S. bank can convert dollars to XRP, send XRP across the ledger in seconds, and have it converted to yen on the other side without pre-funded accounts, without correspondent banks, and without the 3–5 day wait.
The Ripple vs SEC lawsuit — the most important story in XRP’s history
In December 2020, the U.S. Securities and Exchange Commission filed a lawsuit against Ripple Labs, alleging that XRP was an unregistered security and that Ripple had raised over $1.3 billion through illegal securities offerings. The case sent shockwaves through the crypto industry and XRP was immediately delisted from Coinbase and several other U.S. exchanges, and its price collapsed.
The lawsuit ran for nearly five years. In July 2023, Judge Analisa Torres issued a landmark split ruling: XRP sold directly to institutional investors by Ripple constituted unregistered securities offerings, but XRP sold on public exchanges to retail investors did not. This distinction which is now known in legal circles as the Torres Doctrine, was a significant precedent for the entire crypto industry.
In August 2025, both Ripple and the SEC withdrew their remaining appeals. Ripple paid a $50 million civil penalty which was dramatically lower than the SEC’s original $2 billion demand, and agreed to stop making direct institutional XRP sales in the U.S. without regulatory compliance. The case was formally closed, and XRP’s legal status in the United States was definitively established: it is not a security in retail markets.
The resolution had immediate consequences. U.S. exchanges relisted XRP. Institutional investors who had been sidelined for compliance reasons re-engaged. Spot XRP ETFs were approved in late 2025, with Franklin Templeton, Bitwise, Grayscale, and Canary all launching products. In Q1 2026, spot XRP ETFs attracted $1.4 billion in inflows.
For our full breakdown of XRP’s institutional momentum, ETF inflows, and where price could go from here:
⟶ XRP: Institutional Adoption & Price PredictionXRP’s supply — how it differs from Bitcoin
XRP’s supply structure is very different from Bitcoin’s and is a source of ongoing debate among investors.
The total XRP supply was created all at once at launch: 100 billion XRP. There is no mining. No new XRP is ever created. Ripple Labs holds a significant portion of the total supply, approximately 40–50 billion XRP in a series of escrow accounts that release up to 1 billion XRP per month. Any XRP not sold or used in a given month is returned to escrow.
This means Ripple has substantial influence over XRP’s circulating supply. Critics argue this creates centralisation risk and that Ripple could theoretically flood the market with XRP if it chose to. Supporters argue the escrow mechanism is transparent and predictable, and that Ripple’s business incentives align with keeping XRP’s price stable.
Unlike Bitcoin, XRP does not have a halving cycle or a hard cap on how much supply is in circulation at any given time. What it does have is a fee-burning mechanism of a tiny amount of XRP being destroyed with every transaction on the ledger, very gradually reducing the total supply over time.
RLUSD — Ripple’s stablecoin
In December 2024, Ripple launched RLUSD which is a U.S. dollar-backed stablecoin running on both the XRP Ledger and Ethereum. Within one year, RLUSD grew to over $1.38 billion in market capitalisation, making it one of the fastest-growing regulated stablecoins in history by comparison to competitors like USDC in its first year.
RLUSD serves as the cash leg in Ripple’s payment infrastructure for institutions that want to use the XRP Ledger for cross-border settlement but prefer to hold stable-value assets can use RLUSD rather than XRP. This expands Ripple’s addressable market and reduces the friction of XRP’s price volatility in institutional payment flows.
RLUSD also integrates with BlackRock’s BUIDL fund through a Securitize partnership, allowing BUIDL holders to swap their tokenized Treasury fund shares for RLUSD. This is a direct link between the world’s largest asset manager and Ripple’s payment infrastructure.
Ripple’s institutional footprint in 2026
The SEC settlement removed the compliance barrier that had kept U.S. institutions on the sidelines for five years. The consequences in 2026 are tangible.
Over 300 banks and financial institutions across 45+ countries now partner with RippleNet. Japan’s SBI Holdings, one of Japan’s largest financial groups, uses XRP for cross-border payments across Southeast Asia. Malaysia’s Tranglo processes remittances using ODL. Santander uses Ripple’s technology for consumer remittances in Europe.
Ripple spent over $2.7 billion on acquisitions in 2025, including prime brokerage firm Hidden Road for $1.25 billion, which expanded its institutional finance capabilities into securities settlement and margin financing. Ripple also received a conditional national trust bank charter from the U.S. Office of the Comptroller of the Currency, meaning it can operate as a federally regulated fiduciary, giving it the same legal standing as a national bank for custody purposes.
For the bigger picture on how institutional capital is reshaping crypto — including XRP’s role in the tokenization wave:
⟶ Institutional Adoption and Tokenization: Crypto’s Shift Toward Real-World FinanceXRP vs Bitcoin vs Ethereum — key differences
XRP, Bitcoin, and Ethereum are often grouped together as the “top three” cryptocurrencies, but they serve fundamentally different purposes.
Bitcoin is digital gold, a scarce, decentralised store of value with no company behind it and no intended use case beyond holding and transferring value. Ethereum is programmable infrastructure, a platform for building applications, DeFi protocols, and tokenized assets. XRP is a payment network asset designed specifically for fast, cheap cross-border settlement, with a company actively selling the underlying technology to financial institutions.
The decentralisation debate is real. Bitcoin’s network has no owner and no company. Ethereum’s development is guided by a foundation but is broadly decentralised. XRP’s network is faster and cheaper than both, but Ripple Labs’ significant XRP holdings and influence over the validator list mean that XRP is more centralised than its peers. This is a feature for institutions that want a known counterparty, and a criticism for decentralisation purists.
Risks and honest criticisms
The XRP story is compelling, but it deserves honest scrutiny.
Despite 300+ RippleNet partners, relatively few institutions are actively using XRP for on-chain settlement. Many use Ripple’s messaging tools, which speed up SWIFT-style transfers, without actually touching XRP. Ripple’s former CTO David Schwartz has acknowledged that adoption of XRP specifically for settlement is slower than the company would like.
Competition from stablecoins is real. Institutions that want fast cross-border settlement increasingly prefer stable-value assets like USDC or RLUSD itself over a volatile cryptocurrency like XRP. Ironically, Ripple’s own RLUSD could cannibalise XRP’s bridge currency use case if institutions prefer stability over the XRP liquidity model.
Ripple’s escrow holdings give it the ability to release large amounts of XRP into the market, which creates a structural supply overhang that Bitcoin does not have. And XRP’s price, despite all the positive regulatory and institutional developments, ended 2025 below where it started the year which was a reminder that narrative and price do not always move together.
Frequently asked questions
Is XRP a security? No. Not in retail markets. The August 2025 resolution of the Ripple vs SEC lawsuit confirmed that XRP traded on public exchanges is not a security. Ripple’s direct institutional sales were deemed unregistered securities, but that issue has been settled and Ripple has changed its practices accordingly.
What is the difference between XRP and Ripple? Ripple is the company. XRP is the digital asset. Ripple uses XRP in its payment products, but XRP exists independently of Ripple, it runs on the XRP Ledger, which is a decentralised network that would continue operating even if Ripple Labs ceased to exist.
Does XRP have a maximum supply? Yes. 100 billion XRP were created at launch. No more will ever be created. However, Ripple holds a large portion in escrow and releases up to 1 billion per month, meaning the circulating supply is not fixed. A small amount is burned with each transaction, very slowly reducing the total over time.
What is On-Demand Liquidity (ODL)? ODL is Ripple’s flagship product for financial institutions. It uses XRP as a bridge currency to facilitate cross-border payments without pre-funded accounts. A payment provider converts the source currency to XRP, sends it across the XRP Ledger in seconds, and the recipient converts XRP to the destination currency, the whole process completing in under 10 seconds.
What is RLUSD? RLUSD is Ripple’s U.S. dollar-backed stablecoin, launched in December 2024. It runs on both the XRP Ledger and Ethereum and had grown to over $1.38 billion in market cap within its first year. It serves as the stable-value settlement asset in Ripple’s payment infrastructure.
This article is regularly updated to reflect current regulatory developments and market conditions.
