What is XRP?
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🟢 The simple version
Plain English — no jargon. Start here.
XRP is a cryptocurrency built mainly for moving money across borders quickly and cheaply, especially between banks.
Built for sending money
While Bitcoin aims to be "digital gold," XRP has a narrower focus: making it fast and cheap to send money around the world. Today, sending money between countries can be slow and expensive, passing through several banks. XRP was designed to settle those transfers in seconds for a tiny cost.
Who's behind it
XRP is closely associated with a company called Ripple, which works with banks and payment firms. This is a bit different from Bitcoin, which has no company behind it at all. That connection is part of XRP's appeal to some — and part of why others see it as less "decentralised."
The thing to be aware of
XRP has been through a long, high-profile legal case in the United States about whether it should count as a security (a regulated investment). That history makes it more tied to regulatory news than most coins, so its price can react sharply to legal developments. As always, it's volatile — treat it as a risky holding, not a sure thing.
🟡 A bit more detail
For when you want to go a little deeper.
How XRP transfers work — the bridge currency model
Ripple's payment product (RippleNet, now called Ripple Payments) uses XRP as a bridge currency for cross-border transfers. The process: a bank in India holds Indian rupees, which are converted to XRP in milliseconds, transmitted across the XRP Ledger, then converted to US dollars at the destination bank — all within 3–5 seconds. XRP's role is to be the liquid middle: it holds value just long enough to complete the transfer.
This "bridge currency" model works because XRP has deep liquidity on global exchanges, enabling instant conversion to and from almost any currency. It also means the sending and receiving banks do not need pre-funded "nostro/vostro" accounts with each other — a significant cost saving for smaller financial institutions that cannot maintain accounts in every currency they need.
SBI Remit (Japan) uses RippleNet for Japan-to-Philippines remittances. Currencies Direct uses Ripple for European currency transfers. MoneyGram had a partnership with Ripple that was subsequently ended. RLUSD — Ripple's own dollar-pegged stablecoin launched in 2025 — is now used on Binance and integrated into corporate treasury cross-border payment flows. The XRP Ledger itself hosts a native DEX and supports NFTs and tokenised assets independently of Ripple's enterprise products.
XRP supply mechanics
Unlike Bitcoin, XRP was not mined. All 100 billion XRP were created at launch in 2012. Ripple Labs received approximately 80 billion, with 20 billion distributed to founders and early contributors. Ripple placed approximately 55 billion XRP into a cryptographically-secured escrow in 2017, releasing up to 1 billion per month. Unused released XRP is returned to escrow. This means XRP supply increases slowly and predictably — but its rate is controlled by Ripple's decisions about how much to release.
XRP is deflationary in one respect: a small amount of XRP is destroyed (burned) with each transaction as a fee. The current base fee is 0.00001 XRP (10 drops) — negligible per transaction, but meaningful over billions of transactions.
The SEC case — complete regulatory picture
The SEC v. Ripple Labs case (Case No. 1:20-cv-10832) is the most significant cryptocurrency securities lawsuit in US history. The July 2023 ruling by Judge Torres established what has become known as the "XRP framework" for token classification: the same token can be a security in some contexts (institutional sales with investment agreements) and not a security in other contexts (exchange sales to retail public without investment agreements).
The $125 million settlement in August 2025 ended the civil enforcement action. Separately, the SEC-CFTC joint framework of March 2026 classified XRP among the 16 cryptocurrencies designated as "digital commodities" — providing additional regulatory clarity.
Source: SEC v. Ripple Labs Inc., Case No. 1:20-cv-10832 (S.D.N.Y.). Torres, J. (2023). Order on Cross-Motions for Summary Judgment. SEC-CFTC Joint Framework, March 2026.
Key XRP metrics: transaction volume on the XRP Ledger, number of financial institutions on RippleNet, Ripple's escrow releases and sales (tracked monthly at Ripple's transparency reports), and RLUSD stablecoin adoption. The core debate around XRP is whether Ripple's centralised control of supply and its enterprise sales model is compatible with the decentralised ethos of crypto — or whether that distinction matters for a payment-focused asset. Live data: CoinGecko · XRPScan.
🟣 The full technical picture
For the technically curious.
The XRP Ledger — architecture
The XRP Ledger (XRPL) is an open-source, permissionless, peer-to-peer blockchain. It was first released in 2012. The ledger's design philosophy differs fundamentally from Bitcoin and Ethereum: it prioritises settlement speed and efficiency over decentralisation, and it does not use proof-of-work or proof-of-stake.
The XRPL has a native decentralised exchange (DEX) built directly into the base protocol — allowing any two assets issued on the ledger to be traded without a separate smart contract. It also natively supports multi-signature transactions, escrow, payment channels, and cross-currency payments (pathfinding). Smart contracts are supported via Hooks (a WASM-based smart contract amendment) and the EVM sidechain.
Source: XRP Ledger documentation. xrpl.org/docs.html
Federated Byzantine Agreement (FBA) consensus
The XRPL uses a consensus algorithm called the XRP Ledger Consensus Protocol — a variant of Federated Byzantine Agreement (FBA), which was formally developed by David Mazières at Stanford. Unlike proof-of-work, no mining occurs. Unlike classical BFT, there is no fixed set of validators chosen in advance.
Each XRPL node maintains a Unique Node List (UNL) — a configured set of validators it trusts. Consensus is reached when a supermajority (~80%) of validators on a node's UNL agree on the next ledger state. Ripple publishes a recommended default UNL, which most nodes use, though operators can customise their own. Transactions are finalised in 3–5 seconds with irreversible finality.
The FBA model has been studied formally. Its safety and liveness properties depend on sufficient overlap between different nodes' UNLs — if UNLs diverge significantly, the network could fork. Ripple's control over the default recommended UNL gives it de facto influence over network consensus, which is the primary technical basis for concerns about XRPL's centralisation.
The XRPL uses a ledger-based data structure rather than a chain of blocks. Each "ledger version" contains a complete snapshot of all account states, plus a transaction set. Ledger versions are identified by a sequence number and linked by a hash chain. The ledger's state is represented as a Patricia Trie of account objects (AccountRoot, Offer, RippleState, Escrow, etc.). Account reserves (minimum XRP balance required to activate an account) prevent spam at the network level — the base reserve is 1 XRP per account plus 0.2 XRP per object in the account. Ripple can propose changes to the base reserve through the amendment process.
The amendment process
Changes to the XRPL protocol are governed by the amendment process. A proposed amendment becomes active if 80% or more of trusted validators support it continuously for 14 days. No single entity — including Ripple — can unilaterally activate an amendment. However, Ripple's influence over the default recommended UNL means validators running the default configuration may follow Ripple's stated preferences absent independent analysis. This creates governance complexity that is technically documented in the XRP Ledger's amendment specification.
Sources: Mazières, D. (2015). The Stellar Consensus Protocol: A Federated Model for Internet-level Consensus. (The FBA model underlying XRPL consensus.) · XRP Ledger Amendment documentation: xrpl.org/amendments.html
Key protocol parameters
- Total supply: 100 billion XRP (fixed at genesis, no mining)
- Transaction fee: 10 drops (0.00001 XRP) minimum — burned
- Finality time: 3–5 seconds
- TPS: ~1,500 (practical); up to 3,400 theoretical
- Consensus: XRP Ledger Consensus Protocol (FBA-derived)
- Validator model: Permissionless + recommended UNL
- Account reserve: 1 XRP base + 0.2 XRP per object
- Smart contracts: Hooks (WASM) + EVM sidechain
- Native DEX: Yes (built into base protocol)
Source: XRPL documentation. xrpl.org