What is XRP?
XRP is a digital asset designed for cross-border payment settlement, launched in 2012 by Ripple Labs co-founders Chris Larsen and Jed McCaleb. It operates on the XRP Ledger (XRPL), an open-source blockchain that uses Federated Byzantine Agreement consensus to settle transactions in 3-5 seconds without energy-intensive mining. XRP serves as a bridge currency in RippleNet, Ripple's payment network connecting 300+ financial institutions globally.
6 key features of XRP
- Institutional payment focus: Built specifically for banks and financial institutions to settle cross-border payments without correspondent banking delays
- Ultra-fast settlement: Transactions finalize in 3-5 seconds with over 90% of payments reaching finality in under 10 seconds
- Minimal transaction costs: Average fee of $0.0002 per transaction (0.00001 XRP), over 10,000x cheaper than Ethereum's $2.80 average
- High throughput capacity: Native 1,500 TPS with scalability to 65,000+ TPS using payment channels and layer-2 solutions
- Energy efficient: Carbon-neutral operations using consensus protocol instead of proof-of-work mining
- SEC settlement resolved: August 2025 resolution confirmed XRP is not a security for secondary market transactions, enabling U.S. exchange listings
How does XRP work?
XRP uses Federated Byzantine Agreement, a consensus mechanism different from proof-of-work or proof-of-stake.
150+ independent validators operated by universities, exchanges, businesses, and individuals agree on transaction order every 3-5 seconds. No mining is required—when 80% of validators agree, transactions confirm immediately. This consensus protocol eliminates the energy consumption of proof-of-work systems while maintaining security.
Every transaction destroys (burns) a small amount of XRP rather than paying it to validators. The minimum transaction cost is 0.00001 XRP (approximately $0.0002), which increases dynamically during network congestion to prevent spam attacks. No party profits from fees—XRP is permanently removed from circulation.
The network processes 1,500 transactions per second natively and can scale to 65,000+ TPS using payment channels. Over 90% of payments reach finality in under 10 seconds, making XRPL significantly faster than Bitcoin or Ethereum.
What is Ripple vs XRP?
Ripple is the company; XRP is the digital asset. This distinction matters for understanding adoption claims. Ripple Labs is a San Francisco-based fintech company founded in 2012 that builds payment infrastructure software. XRP is an open-source digital asset native to the XRP Ledger blockchain, created before Ripple was formed. The XRP Ledger architects gifted 80 billion XRP to Ripple so the company could build use cases around the digital asset.
Ripple operates RippleNet, a payment network connecting 300+ financial institutions for real-time messaging and settlement. Banks can use RippleNet without ever touching XRP—many use it only for messaging, similar to how correspondent banking works but faster. Only 40% of RippleNet partners actively use XRP through On-Demand Liquidity (ODL), which uses XRP as a bridge currency between fiat currencies.
Major institutions including American Express, Santander, and Bank of America use RippleNet infrastructure but avoid the XRP token. This creates a gap between RippleNet's institutional network and actual XRP adoption.
What is XRP used for?
XRP serves primarily as a bridge currency for cross-border payments, though adoption varies by institution.
- Cross-border payments: Financial institutions use XRP through ODL to eliminate pre-funded nostro accounts in destination currencies. When moving funds from USD to Philippine pesos, ODL converts USD to XRP, transfers XRP across the ledger in 3-5 seconds, then converts XRP to PHP. This delivers 3-5 second settlement versus SWIFT's typical 2 business days.
- Remittance corridors: 70+ active ODL corridor pairs cover an estimated 80% of major global remittance routes. The U.S.-Mexico corridor processed $2 billion in 2024 transactions. Latin American corridors grew 23% in 2024, with strong adoption in Japan, Philippines, Brazil, Argentina, and Chile.
- DeFi and tokenization: XRPL features the first decentralized exchange built into the protocol and supports custom token issuance. Applications include payments, asset tokenization, and CBDC infrastructure for 20+ central banks exploring pilots.
- Institutional treasury: Some institutions hold XRP briefly during settlement, though price volatility creates accounting challenges. Ripple launched RLUSD stablecoin to address this—surpassing $1 billion market cap within one year to provide stable-value settlement alongside XRP.
How is XRP different from Bitcoin?
XRP optimizes for payment speed and institutional settlement; Bitcoin focuses on decentralized store of value.
- Consensus mechanism: Bitcoin uses energy-intensive proof-of-work mining requiring 10+ minute confirmation times. XRP uses consensus protocol with 3-5 second finality and minimal energy consumption—XRPL is carbon-neutral versus Bitcoin's electricity consumption equivalent to Argentina's annual usage.
- Transaction costs: Bitcoin averages $1.35 per transaction; XRP costs $0.0002—over 6,000x cheaper. Bitcoin fees spike during congestion; XRP maintains sub-cent costs even at high network activity.
- Throughput: Bitcoin processes ~7 TPS with scalability challenges. XRP handles 1,500 TPS natively and scales to 65,000+ TPS, making it viable for institutional payment volumes.
- Supply model: Bitcoin has 21 million hard cap with mining rewards creating new supply until ~2140. XRP had 100 billion created at launch with no new XRP ever created—supply decreases over time as transaction fees burn XRP.
Is XRP a security?
After a multi-year legal battle, the SEC case concluded with XRP classified as not a security for secondary market transactions.
The SEC sued Ripple Labs in December 2020, alleging XRP was an unregistered security. The lawsuit caused major U.S. exchanges to delist XRP, limiting retail access and stalling institutional partnerships for four years.
In August 2025, both parties withdrew appeals after court decisions. Ripple paid $125 million fine. The court confirmed XRP is not a security for secondary market transactions—only certain institutional sales by Ripple were classified differently. This distinction is now well understood by market participants.
Following the settlement, Coinbase, Kraken, and Gemini re-listed XRP, leading to 17% trading volume increase within 30 days. ETF approvals followed within months—four U.S. XRP ETFs launched in November 2025, attracting $941 million in assets within eight weeks.
XRP statistics for 2026
- $88.4 billion market capitalization with 60.9 billion circulating supply, ranking #4 globally among all cryptocurrencies
- 300+ financial institutions on RippleNet across 55+ countries, though only 40% actively use XRP for settlement versus messaging-only
- $15 billion in ODL payments for 2024, up 32% year-over-year, with $1.3 billion processed in Q2 2025 alone
- 1.8 million daily transactions in Q3 2025, up 9% quarter-over-quarter, with 55.7% classified as payment transactions
- 56% of ODL volume from Asia-Pacific per CryptoSlate, driven by Japan and Philippines corridors
- $941 million in XRP ETF assets within two months of November 2025 launch, with four U.S. ETFs holding 781 million XRP
- $2 billion in U.S.-Mexico transactions in 2024 via Bitso exchange, demonstrating real-world remittance adoption
- 40-60% cost reduction versus SWIFT for institutions using XRP according to Ripple partner reports
- 70 million ledgers closed since 2012 with near 100% success rate, demonstrating network reliability
