XRP and Ripple: Revolutionizing Crypto Applications
On March 2nd, 2025, the cryptocurrency market saw a surge of activity, spurred by a statement from Donald Trump regarding the US Crypto Reserve. This announcement, which highlighted the importance of XRP, SOL, and ADA, immediately boosted market confidence.
While some, like BitMEX co-founder Arthur Hayes, called the news unsurprising, it sparked renewed interest in XRP and the Ripple business model. This article provides an overview of Ripple and XRP, exploring their relationship and their roles in both Web2 and Web3 applications.
This project, which combines both Web2 and Web3 business models, is worth study, especially in the context of mass cryptocurrency adoption.
1. Ripple Labs: The Fintech Innovator
Ripple is a US-based financial technology company, also known as Ripple Labs. The company provides cross-border payment and financial settlement solutions utilizing blockchain technology. Its main goal is to streamline international remittances, increasing speed and decreasing costs.
Ripple’s solutions include:
- RippleNet: A payment network for cross-border payments and remittances.
- RLUSD stablecoin: A recently launched stablecoin.
The underlying technology behind Ripple’s services is the XRP Ledger (XRPL), an independent distributed ledger that records and validates transactions. XRP is the native utility token of the XRPL ledger.
XRPL is an alternative to the SWIFT global financial messaging network used by traditional financial institutions. It enables financial institutions and payment providers to offer innovative services, including digital wallets and decentralized applications (DApps).
RippleNet encompasses the various financial products developed to leverage the XRP Ledger and XRP. It’s a global payments network that connects financial institutions like banks and payment processors, enabling real-time settlement and currency exchange.
2. The XRP Ledger: A Blockchain Network
In 2011, Jed McCaleb began development of a new digital currency consensus network. After collaboration with Ryan Fugger, the project was renamed Ripple. The XRPL was created in 2012 with XRP as its native token.
The XRP Ledger is a blockchain-based payment protocol designed for cross-border payments and central bank digital currency (CBDC) management. It utilizes the Cobalt consensus mechanism and the Ripple protocol consensus algorithm, making it distinct from Proof of Work (PoW) or Proof of Stake (PoS) blockchains. The XRP Ledger offers fast transaction times and low costs.
XRP’s main function is to facilitate transaction fees on the XRPL. After the launch of the XRP Ledger Network, Jed McCaleb and Arthur Britto co-founded a company called NewCoin, later renamed Ripple Labs Inc. The new company received 80 billion XRP. Jed McCaleb later left Ripple and founded Stellar.
3. XRP: The Native Token
XRP, the native token of the XRP Ledger, aims to provide a faster and more cost-effective global payment solution compared to traditional systems. While XRP is associated with Ripple, it operates independently, with the XRP Ledger maintained by independent verification nodes. Ripple only holds a large amount of XRP and participates in technology development.
This independence provides XRP with scalability, creating a financial payment ecosystem. XRP has various uses, including:
- DeFi
- Tokenization
- Independent payment tools
The value of XRP is not directly tied to Ripple’s success or failure, and conversely, Ripple cannot restrict anyone from using it for their own services through the XRP Ledger network.
In Ripple’s ODL (On-Demand Liquidity) solution, XRP acts as a bridge currency for cross-border payments, replacing the pre-deposit fund pool in a traditional banking system:
- For example: Bank of America converts USD to XRP.
- XRP is sent to Mexico.
- Bank of Mexico converts XRP to pesos.
The XRPL’s consensus mechanism ensures rapid transaction confirmation, avoiding capital occupation and exchange rate risks, with extremely low transaction costs.
4. RippleNet: A Global Payment Network
RippleNet is a global financial payment network designed by Ripple to connect financial institutions, such as banks, payment service and remittance companies, and optimize cross-border payment processes. It is an enterprise-level solution that addresses the inefficiencies of the traditional financial system.
RippleNet utilizes blockchain technology to enable financial institutions to transfer funds, aiming to establish a unified global payment system. This helps to reduce friction and costs compared to the older, inefficient payment systems used in traditional finance. RippleNet provides rapid payment processing, typically completing transactions within seconds.
Technically, all transactions made via RippleNet products are recorded on the XRP Ledger blockchain.
RippleNet aims to solve these problems by providing a decentralized global banking network for everyone to use. By connecting to the network through an application programming interface (API), users can transfer funds internationally faster and cheaper than traditional methods.
RippleNet offers several key features:
- Real-time settlement: Transactions are completed within seconds, bypassing the delays of traditional methods.
- Unified standards: Standardized APIs and protocols (such as ILP, Interledger Protocol) eliminate format and compliance differences.
- Multi-Currency support: Supports exchanges between fiat currencies, cryptocurrencies, and even commodities.
- Cost reduction: Reduces cross-border payment costs by lowering intermediary and liquidity deposit requirements.
RippleNet offers three key products:
4.1 xCurrent
xCurrent provides banks with a low-cost solution for cross-border payments. Banks access it through an API.
4.2 xRapid
xRapid ensures customers can obtain liquidity through XRP tokens. It provides fast conversions, eliminating the need for pre-funded accounts.
4.3 xVia
xVia is the API that ensures customers can easily connect to RippleNet services. It supports sending payments with detailed information.
4.4 RippleNet Partnerships
RippleNet has partnered with more than 300 financial institutions globally, including Santander and SBI Remit (Japan), and with major institutions like Bank of America and American Express.
5. RLUSD Stablecoin
Ripple’s launch of RLUSD stablecoin, with a focus on regulatory compliance, connects traditional finance with digital assets. This move allows businesses to benefit from the stability and transparency that Ripple offers.
RLUSD is integrated with both the XRP Ledger and Ethereum network and provides:
- Native stablecoin support.
- Automatic bridging and DEX integration.
- Institutional DeFi applications.
RLUSD is useful in many areas:
- Fiat-to-Crypto Gateway: converting between fiat and cryptocurrencies
- Global Money Transfers: Fast and affordable international transactions
- Everyday Transactions: For everyday purposes and avoiding the use of cash or cards
- RWA Tokenization: For collateral backing of tokenized assets
- DeFi Integration: For trading, yield farming, staking, and loans in XRPL and Ethereum dApps
By aligning itself with regulatory efforts, RLUSD seeks to foster compliance and maintain institutional client confidence. This move also positions RLUSD as a multi-chain asset, preparing it for participation in CBDC (central bank digital currency) and institutional DeFi markets. In the market, RLUSD also has the advantage of leveraging RippleNet’s numerous financial institution partners.
6. Final Summary
Ripple is a Web2 fintech company that launched the XRP Ledger blockchain network, with XRP as the native token. XRP is an independent cryptocurrency acting as a bridge currency on RippleNet. The launch of RLUSD is pivotal to Ripple’s growth, attracting developers to create stablecoin-related DeFi applications on XRPL, and improving XRP’s value and on-chain activity. Meanwhile, RLUSD forms an ecological synergy effect by extending beyond the XRP ecosystem.
