In a digital asset landscape dominated by narratives around programmability, scarcity, or yield, XRP stands out for its focus on something more utilitarian: improving global money movement. XRP is one of the longest-standing cryptocurrencies, largely a result of its singular focus on infrastructure over speculation.
For institutional investors exploring digital assets beyond Bitcoin and Ethereum, XRP offers exposure to a protocol designed for fast, efficient, cross-border settlement and real-world financial architecture. This article unpacks what XRP is, how it works, and why it continues to play a central role in the evolution of global finance.
The Origins of XRP and Ripple
XRP was launched by Ripple Labs in 2012, well before Ethereum and most other altcoins. The founding vision of the team led by engineers David Schwartz, Jed McCaleb, and Arthur Britto, was simple: to create a superior global payment system that can move money as quickly and efficiently as data. This mission arose from the inefficiencies of legacy systems like SWIFT and the high operational costs of cross-border banking.
Unlike Bitcoin or other digital assets designed as decentralized alternatives to money or technology layers, XRP was designed from day one to enable fast, low-cost international value transfer. Ripple Labs remains closely associated with the cryptocurrency, but XRP itself functions independently and is traded globally on dozens of crypto exchanges.
Ripple vs XRP: A Necessary Distinction
Although Ripple and XRP are often used interchangeably, the two are distinct but interconnected. Ripple is a private software company that builds blockchain-based solutions for financial institutions while XRP specifically refers to the digital asset that powers some of these solutions. In particular, Ripple’s On-Demand Liquidity (ODL) service uses XRP as a bridge currency for on-demand liquidity primarily outside the US, but now increasingly also within the US since the recent settlement of proceedings commenced by the SEC.
It is important to note that the initial 100 billion XRP supply was pre-mined and largely allocated to Ripple, which now holds nearly half in time-locked escrow accounts for programmatic release to minimize market impact.
XRP Ledger Architecture and Performance
The XRP Ledger (XRPL) is a decentralized, public blockchain built for efficient and low-cost financial transactions engineered for throughput and reliability. Unlike Bitcoin’s Proof-of-Work (PoW) or Ethereum’s Proof-of-Stake (PoS) systems, XRPL uses a consensus mechanism based on a Unique Node List (UNL).
The XRPL's consensus protocol efficiently builds new validated ledger versions by having validators agree on a set of transactions to apply to a previous ledger, ensuring consistent results, with each new validated ledger containing updated state data, a transaction set, and metadata.
Source: xrpl.org
Key performance characteristics include:
- Finality: Transactions are settled with certainty in 3–5 seconds.
- Scalability: The ledger can process over 1,500 transactions per second with negligible fees.
- Energy Efficiency: With no mining involved, the energy footprint is a fraction of PoW chains.
Furthermore, the XRPL's functionality extends beyond its native XRP, enabling the transfer of diverse digital assets. This includes support for features like a built-in decentralized exchange (DEX), token issuance (IOUs), and payment channel functionality. Smart contract-like capabilities are being explored via extensions such as “Hooks,” which could broaden XRPL’s utility without sacrificing performance.
XRP’s Core Use Case: Payments and Liquidity
XRP’s design makes it ideal for bridging currency pairs in real time. Its role in Ripple’s ODL product allows financial institutions to conduct cross-border transactions without relying on pre-funded nostro accounts. This unlocks capital efficiency which is a key institutional priority.
Source: 3iQ
Rather than slowly routing a USD-to-PHP (Philippine peso) transaction through a chain of correspondent banks, XRP allows a transaction to be settled in seconds. USD is converted into XRP on one end, transmitted across the XRP Ledger, and converted into PHP on the other. The entire process costs a fraction of a cent and settles with finality in 3–5 seconds.
This has proven especially valuable in emerging markets, where correspondent banking infrastructure is limited or expensive. The growing international adoption of ODL by clients, including firms in the Philippines, Mexico, UAE, and Africa, reflects XRP’s appeal as a neutral settlement layer.
Source: 3iQ
The chart above visualizes XRP Ledger transaction speed vs traditional systems. It clearly illustrates XRP Ledger’s speed advantage, with finality in seconds compared to minutes, hours, or even days for legacy payment rails like SWIFT and ACH.
Conclusion: XRP as a Settlement Layer for the Real World and Why It Matters to Investors
XRP was built for a clear purpose and more than a decade later, that purpose still defines its value. Whether XRP replaces SWIFT is still an open question, but it has already demonstrated tangible improvements in cost and speed for specific remittance and SME payment use cases. In domains where traditional banking infrastructure is weak or inefficient, XRP is increasingly being deployed as a viable alternative.
Although XRP's investment thesis is centered on its real-world use case by institutions in actual markets, its performance remains a key point of attractiveness. Since 2015, XRP has delivered over 10,800% price appreciation, making the fourth-ranked digital asset by market capitalization one of the top-performers over the past decade. Illustrating this, XRP has outperformed both Bitcoin and Ethereum since the court’s ruling that XRP sales to retail investors on public exchanges does not violate securities laws.
Following a favorable SEC court ruling in July 2023, XRP (black line) has significantly outperformed both Bitcoin (the orange line) and Ethereum (the blue line) over the period shown (data correct as of June 27 2025).
Recent legal clarity and launch of the first spot XRP ETFs in North America will likely only serve to further boost investor confidence. As a tried and tested way to get simplified exposure to digital assets, ETFs are now widely recognized as a primary investment vehicle.
The 3iQ XRP ETF (TSX: XRPQ. XRPQ.U), launched on the Toronto Stock Exchange (TSX) on June 18, makes it simple to get cost-effective and tax-efficient exposure to XRP. XRPQ begins with a 0% management fee for its first six months. It exclusively invests in long-term XRP holdings acquired from reputable digital asset trading platforms and over-the-counter (OTC) counterparties, with all underlying assets fully secured in standalone cold storage. While available for investment through registered accounts in Canada, its TSX listing also facilitates access for qualified investors globally, subject to local regulations.
