Imagine sending money across the world as quickly texting your best friend. That’s the mission XRP set out to accomplish. While Bitcoin was originally aiming to replace cash, XRP was designed with a more focused mission: fix the slow, expensive, headache of international payments. Think wire transfers that take days or fees that eat into your money. XRP aims to make all that go away.
Launched in 2012 by Chris Larsen and Jed McCaleb, XRP is the digital asset at the heart of a larger mission driven by Ripple, the company behind its development. Together, they built a system where banks and financial institutions can settle cross-border payments in seconds, at a fraction of today’s cost.
Today, XRP consistently ranks among the top cryptocurrencies, and not because it's trying to be the next Bitcoin, but because it’s transforming how money moves around the globe.
How XRP Works
XRP operates on the XRP Ledger (XRPL), a distributed computing platform that records and verifies financial transactions. While many people associate cryptocurrencies with blockchain mining, the XRPL uses a unique consensus mechanism rather than Proof of Work or Proof of Stake. Independent validator nodes reach agreement through a consensus protocol, confirming transactions in roughly 3–5 seconds.
Transaction fees are typically a fraction of a penny, making XRP significantly cheaper than many alternatives. By comparison, Bitcoin transactions can take minutes and often involve higher fees depending on network congestion. XRP’s methodology prioritizes speed, scalability, and energy efficiency, making it suitable for real-time computing in global finance.
RippleNet, developed by Ripple Labs, connects banks and financial services providers. Through its On-Demand Liquidity (ODL) solution, XRP acts as a bridge currency between fiat money pairs, eliminating the need for pre-funded bank accounts abroad. For example, a bank can convert United States dollars into XRP, transfer it across borders, and convert it into another currency within seconds. This reduces cost, improves market liquidity, and enhances overall settlement efficiency.
Ripple vs XRP: Understanding the Difference
One of the most common sources of confusion is the distinction between Ripple and XRP. If you’ve been around long enough, you might’ve seen the token referred to as Ripple (XRP). However, they are not the same thing, and in the past few years there’s been a dedicated effort to draw a distinction between the two.
The evolution of the XRP logo.
Ripple Labs is the company that created and continues to develop products built around the XRP Ledger. XRP, on the other hand, is the cryptocurrency, which is used for payments, liquidity, and transaction settlement.
RippleNet is the payment network, XRP is the token, and Ripple Labs is the organization building enterprise financial services software. While Ripple holds a significant portion of XRP in escrow, it does not directly control the decentralized ledger’s validation process. Independent validators maintain consensus across the computer network.
A helpful analogy is the relationship between a technology company and its product. Ripple is the company; XRP is one of its core products operating within a broader blockchain ecosystem.
Features and Use Cases
XRP’s primary utility lies in cross-border payment settlement. Traditional wire transfer systems, such as SWIFT, often involve multiple intermediaries, higher fees, and slower processing times. XRP provides an alternative infrastructure that allows financial institutions to move capital across borders with greater speed and transparency.
Banks can use XRP as a bridge asset to source liquidity on demand, reducing the need to lock up funds in foreign accounts. This function is particularly valuable in remittance corridors where foreign exchange market spreads increase costs.
Beyond payments, the XRP Ledger also supports tokenization of digital assets, including stablecoins and other financial instruments. With low fees, scalability, and efficiency, XRP continues to position itself as infrastructure for modern fintech and global settlement systems.
Key Features
Near-Instant Settlement: Transactions achieve deterministic finality in 3–5 seconds, providing real-time liquidity without the multi-day delays of traditional banking.
Ultra-Low Transaction Costs: Fees are negligible, typically costing $0.0002 or less, making the network ideal for high-volume micro-payments and institutional transfers.
High-Throughput Scalability: Built for global demand, the ledger handles a sustained 1,500+ transactions per second, matching the performance of major credit card processors.
XRP Supply and Tokenomics
Unlike Bitcoin, XRP was not mined. At launch, a total supply of 100 billion XRP was created. A portion entered circulation, while a significant amount was placed in escrow by Ripple Labs. These escrowed tokens are released on a predetermined monthly schedule, with unused tokens returned to escrow.
This structured supply model aims to provide transparency and predictability in currency circulation. Additionally, a small fraction of XRP is permanently destroyed with each transaction as a fee, introducing a minor deflationary element over time.
Supply dynamics, escrow releases, and overall market demand influence XRP’s price and market value. Understanding these tokenomics is essential for evaluating long-term supply and demand trends.
Regulatory Status and Legal Clarity
XRP’s regulatory status has been shaped by its high-profile lawsuit with the U.S. Securities and Exchange Commission. In 2020, the SEC alleged that Ripple Labs conducted an unregistered securities offering. The case became a landmark legal battle for the cryptocurrency industry.
In 2023, a U.S. federal court ruled that XRP sales on public exchanges did not inherently constitute securities transactions, providing partial legal clarity. However, certain institutional sales were treated differently under securities law. The ruling established an important precedent and influenced how regulators approach digital assets.
This development improved investor confidence and reopened access to XRP on several U.S. trading platforms. Globally, regulatory treatment varies by jurisdiction, but increasing clarity in the United States has strengthened XRP’s position within the broader financial services market.
Bottom Line
XRP is a cryptocurrency built for speed, cost efficiency, and cross-border settlement. Ripple Labs develops enterprise financial services products around the XRP Ledger, while the XRP token functions as a bridge asset within that ecosystem. Its future will depend on continued institutional adoption, regulatory clarity, and broader cryptocurrency market trends. For anyone exploring XRP, understanding its technology, supply structure, and legal context is essential before making financial decisions.
Where to Get XRP
If you’re interested in XRP and its role in cross-border payments and institutional settlement, you can find it on Tap, alongside a wide range of other cryptocurrencies.
This article is for general information purposes only and is not intended to constitute legal, financial or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.
