XRP & Ripple: Revolutionizing Global Payments Through Blockchain

KEYTAKEAWAYS

TABLE OF CONTENTS

• KEY TAKEAWAYS
• HOW RIPPLE USES XRP TO TRANSFORM PAYMENTS
• RIPPLE’S DIVERSIFICATION STRATEGY
• CHALLENGES AND FUTURE OUTLOOK
• DISCLAIMER
• WRITER’S INTRO

CONTENT

Recently, XRP briefly surpassed ETH to become the second-largest cryptocurrency by fully diluted valuation. In early 2025, XRP’s market cap reached $100 billion. While XRP is well-known, many misunderstand Ripple, the company behind it.

Ripple was founded in 2012 as a fintech company using blockchain to transform cross-border payments. XRP is an independent cryptocurrency running on the XRP Ledger. Although Ripple holds 55% of all XRP, they are distinct entities:

• Ripple is a company providing blockchain payment solutions
• XRP is a cryptocurrency that works as a bridge currency
• XRP Ledger is the blockchain supporting XRP

HOW RIPPLE USES XRP TO TRANSFORM PAYMENTS

Ripple’s main product is On-Demand Liquidity (ODL), which uses XRP as a bridge currency. Traditional SWIFT payments require pre-funded accounts in destination countries, locking up capital and involving complex clearing processes.

The ODL process is simple:

1. Convert sender’s currency to XRP
2. Transfer XRP across borders in seconds
3. Convert XRP to recipient’s local currency

This bypasses traditional banking layers. Ripple has partnered with over 300 financial institutions worldwide, including major banks like Bank of America and Santander.

XRP offers three key advantages:

• Speed: Transactions complete in seconds versus 3-5 days with SWIFT
• Cost: Reduces fees by 40-60% by eliminating intermediaries
• Flexibility: Directly connects currency pairs without using USD as an intermediate step

Despite these advantages, Ripple’s market penetration remains small. In 2023, their transaction volume was $70 billion—less than 0.04% of the global cross-border payment market. Challenges include institutional resistance, regulatory uncertainty, and XRP price volatility.

RIPPLE’S DIVERSIFICATION STRATEGY

To reduce dependence on XRP sales, Ripple is expanding beyond payments:

1. RLUSD Stablecoin

In 2024, Ripple launched RLUSD, a USD stablecoin approved by New York regulators. This stable asset allows financial institutions to settle cross-border transactions without XRP’s volatility. By early 2025, RLUSD’s market cap exceeded $500 million.

2. Custody Services

Ripple acquired Metaco ($250 million) and Standard Custody ($100 million), gaining custody technology and regulatory licenses. These services now contribute 15% of company revenue and are growing 20% quarterly.

3. Broader Ecosystem Development

Ripple is building a wider ecosystem through:

• A $300 million developer fund for XRP Ledger projects
• Enterprise blockchain solutions for large corporations
• Central bank digital currency (CBDC) consulting services

In 2024, they introduced smart contract functionality to XRP Ledger, expanding its potential applications.

CHALLENGES AND FUTURE OUTLOOK

Ripple faces three major challenges in its transformation:

1. Fierce competition in stablecoins (against USDT/USDC), custody services, and enterprise blockchain
2. Regulatory complexity across different jurisdictions
3. Technical integration of new businesses with existing systems

Ripple’s success depends on shifting from a “market belief-driven” model to a “value creation-driven” model. For investors, understanding the balance between XRP’s technological utility and its commercial applications is crucial.

XRP is not merely a speculative asset, and Ripple is not just a company selling XRP. Together, they represent how blockchain technology can potentially transform the traditional financial system. Whether they succeed or not, their journey offers valuable lessons for the entire blockchain industry.

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