What is XRP? A Beginner’s Guide

Key points

• The XRP Ledger (XRPL) was first launched in 2012 by developers David Schwartz, Jed McCaleb, and Arthur Britto.
• XRP is used for peer-to-peer payments on the XRPL due to fast block times, high throughput and quick transactions.
• The U.S. Securities and Exchange Commission’s protracted case against Ripple, the technology company that developed XRP, concluded in August 2025. The court’s final judgement was that retail XRP transactions are not securities, while some institutional sales were ruled as securities transactions under U.S. law.
• Major financial institutions worldwide such as Santander, Standard Chartered, and Travelex Bank have endorsed Ripple’s technology to transact globally.

XRP is one of the largest cryptocurrencies in the world, with a market cap of over $88 billion (at the time of writing). It's also a top-ten mainstay by market capitalisation in cryptocurrency rankings.

But what is XRP, how does it work, and why does it have value?

This article will explore the core elements of Ripple, its purpose, and how its currency, XRP, differs from other digital assets.

What is Ripple?

Founded in 2004, Ripple (originally Ripplepay) is a fintech company based in San Francisco. Even before the company delved into crypto in 2012, its core focus was largely the same: to improve upon the legacy settlement systems for international transactions with cheaper and faster settlements.

After entering crypto markets with the launch of its native token, XRP, Ripple has built out an entire global payments network known as RippleNet. The network offers real-time gross settlements for financial institutions, and other features to make banking across borders simple, affordable and faster than incumbent, long-standing settlement and transfer infrastructure.

Designed from the start to replace one of the largest money transfer networks, SWIFT, RippleNET can facilitate exchange between a variety of currencies — not limited to fiat — including the likes of Bitcoin and even commodities like gold. Ripple charges users a miniscule transaction fee (in XRP) to use the network.

What is XRP?

XRP is a decentralised digital asset and the native token of the open-source XRP Ledger, designed for high-speed, low-cost international payments. The XRP Ledger (XRPL) is a distributed, open-source, permissionless blockchain maintained by a network of peer-to-peer servers (known as unique nodes).

XRP functions as a mechanism of exchange between two different currencies or networks and can be sent directly without the need for an intermediary. Think of it as being able to send cash directly to someone overseas without the need for a bank or payment processor to handle the transaction. The peer-to-peer nature of XRP makes it a convenient tool for bridging two currencies in a matter of seconds, not days. This saves time and money and simplifies the process of international transactions. Banks in various countries have also adopted XRP for routine hawala transfers.

Recommended reading: 6 Types of Altcoins & Their Uses

How has XRP performed in recent years?

In the 2017/18 bull market, XRP reached an all-time high of US$3.84. Since that time, several challenges, including wider market corrections and the U.S. Securities and Exchange Commission’s (SEC) case brought against XRP in 2020 (more on that below), saw its price hit lows of around US$0.15 in mid-2020 and US$0.38 in July 2024. The months following the July 2024 low saw XRP gain almost 600%. These gains were due to positive crypto sentiment following President Donald Trump’s election in November 2024, progress in the U.S. SEC’s case against Ripple, growing usage of the network, and the launch of spot XRP exchange-traded funds (ETF) in late 2025.

On 18 July 2025, XRP hit a seven-year high of US$3.66, driven by a surge in “OG” altcoins, regulatory clarity following the passage of major crypto bills in the U.S. Congress, and anticipation that the SEC’s longstanding case against Ripple was coming to a final conclusion. XRP has since sold off to a low of US$1.12 on Friday, February 6 amid broader bearish crypto sentiment. While price remains 61.3% below its 2018 all-time high of US$3.84, the cryptocurrency’s 2026 roadmap and recent developments signal that XRP could be entering an exciting new stage of growth as usage and the potential for further regulatory clarity combine to drive upward momentum.

What are the catalysts causing moves in XRP’s price?

Recent developments have demonstrated XRP’s growing adoption, while Ripple, the creator and issuer of XRP, continues expanding utility across its product suite. Below, we outline some of the key catalysts that have increased market participants’ interest in XRP since late 2024:

RLSUD stablecoin:

Ripple’s RLUSD stablecoin launched on December 17, 2024. Originally available for purchase across a range of exchanges, the RLSUD is a U.S. dollar-denominated stablecoin issued by Standard Custody & Trust Company. Its market capitalisation at the time of writing is US$1.5 billion. Since its initial launch on crypto exchanges, RLSUD has expanded to other chains, with Ripple testing RLUSD on Ethereum layer-2 networks via Wormhole, including Optimism, Base, Ink and Unichain. Binance has also integrated the XRP Ledger for RLUSD onto its network, meaning that users can make RLUSD deposits while trading on the network incurs zero fees on some pairs. The continually expanding utility of RLUSD demonstrates how stablecoins are a viable channel for completing transactions, while Ripple continually delivers on its development roadmap and forges strong relationships with key industry players.

US$500 million funding round:

In November 2025, Ripple raised US$500 million in a strategic private funding round that valued the company at approximately US$40 billion. The capital raise was led by institutional investors, including Fortress Investment Group and Citadel Securities, with participation from Brevan Howard, Marshall Wace, Galaxy Digital and Pantera Capital. The successful capital raise underscores Wall Street’s confidence in Ripple’s institutional crypto infrastructure growth, supports expansion beyond payments, and helps fuel tokenisation, custody, and treasury products, all while Ripple remains privately held instead of pursuing an IPO.

Spot XRP ETFs:

In late 2025, spot XRP ETFs launched, giving investors a way to gain exposure to XRP through traditional finance (TradFi) channels. Canary Capital’s Spot XRP ETF saw inflows of US$250 million on launch day, making it the biggest crypto ETF launch in 2025. There are now five spot XRP ETFs available, with over US$2.5 billion in assets under management across the funds. Throughout 2026 to date, spot XRP ETFs are also leading in fund flows, with US$148 million in net inflows.

Ripple’s 2026 roadmap:

At its community day in February 2026, Ripple unveiled its 2026 roadmap. The plan shifts the XRP Ledger (XRPL) from a simple payments network to a full institutional-grade decentralised finance (DeFi) operating system. This will be achieved through the launch of native DeFi Lending Protocol (XLS-66), which will turn XRP from a bridge asset into a yield-generating token that could be an option for institutional treasuries. Permissioned markets, privacy tools, tokenised collateral, and credentialed access will also satisfy regulated finance use cases, ensuring the company complies with relevant legislation. Further, Ripple’s 2026 roadmap emphasises compliant tokenisation, cross-chain liquidity, smart contracts, interoperability via zero-knowledge (ZK) proofs, and deeper global banking integration. This positions XRP and XRPL as core infrastructure for real-world finance, while CEO Brad Garlinghouse’s recent addition to the Commodity Futures Trading Commission's (CFTC) 35-member advisory committee means the company is well positioned to contribute to and shape crypto regulation in the U.S.

While the end of 2025 and early 2026 saw bearish sentiment across the crypto market, particularly driven by the US$19 billion liquidation event on October 10, it also means many cryptocurrencies are potentially undervalued and could see upside should the right market conditions and catalysts prevail.

Are Ripple and XRP the same?

When talking about XRP, one might often hear it used interchangeably with Ripple. However, the two are quite different.

Ripple is a company that provides a blockchain-based digital payment network for its users. XRP is the crypto asset that facilitates payments on this network. XRPL is the software ledger where transactions with XRP are recorded.

The company has undergone multiple rebrandings over time to reflect changes in ownership or direction of the project. In 2023, Ripple acquired crypto businesses Metaco and then Fortress Trust to “support our existing lines of business — specifically in terms of improving the customer experience”. Continuing the takeover strategy in 2024, Ripple bought out Standard Custody, a custody provider designed to service institutions. Throughout the business’s evolution, one thing that has remained consistent is the ticker symbol XRP for its native cryptocurrency.

How does XRP and the XRP Ledger work?

The XRP Ledger

The XRPL consensus model is built upon a core principle: a little trust goes a long way.

Unlike Bitcoin’s Proof of Work or Ethereum’s Proof of Stake protocols, the XRP Ledger doesn’t use mining or staking to validate transactions. Rather, it allows trusted, permissioned servers to create consensus on the network. These servers, or unique nodes, maintain a “unique node list” - a list of nodes that the network deems trustworthy.

If 80% of nodes deem a transaction to be valid, a unique node can then proceed with validating that transaction.

In the past, the XRPL has experienced out-of-sync issues, leading to downtime across the network. When one node on this list is compromised, the effects can spill over to other nodes, further slowing down the network. However, reliability has improved in recent times.

XRP - The native token

The total supply of XRP (100 billion) was created and distributed to individuals and companies at the launch of XRPL. Unlike other consensus mechanisms, nodes do not earn rewards for maintaining the correct version of the ledger.

There are some customers on Ripple’s Digital Payment Network, RippleNet, that prefer to send funds without a pre-funded account. Ripple makes this possible through their on-demand liquidity service. In this service, XRP, along with a pool of other digital assets (e.g. Bitcoin, Ether, Ethereum Classic, Bitcoin Cash, and Litecoin), is used to provide liquidity for these transactions.

When parties have different preferred methods of sending or receiving money or use different currencies, RippleNet acts as an intermediary for their transaction. As both parties are using different currencies to transact, no physical money moves during the process. Rather, the transaction is conducted in XRP, which equals the value of the money being sent. The network also charges a small fee (in XRP) to complete the transaction, but it’s minuscule when compared to other traditional international payment networks, such as SWIFT.

How is XRP different from Bitcoin?

There are many core differences between XRP and Bitcoin. Firstly, Bitcoin achieves network consensus by using a Proof of Work (PoW) model to validate transactions, whereas XRP uses a consensus protocol across participating nodes to validate transactions through a vote. Given that this method is less energy intensive, some might argue that XRP is more environmentally sustainable than Bitcoin.

Additionally, Bitcoins are released into the network through mining. XRP was pre-mined at launch. A smart contract—not miner activity—controls the release of any future tokens on the network.

Lastly, although both projects are open source, XRP was created and distributed by a privately-owned company, whereas Bitcoin is not owned by any one individual or organisation.

Advantages and disadvantages of XRP

XRP aims to improve how banks and individuals transact money across borders. Let’s explore what sets XRP apart from other digital assets, as well as some challenges that it is trying to overcome.

Advantages

• Low fees: Using XRP for cross-border transactions eliminates the need for a third-party intermediary (such as a bank), resulting in fees far less than $0.01. Users in different countries can transact while avoiding currency conversion fees often charged by banks. If using traditional methods, these fees can reach as high as US$50 in some cases.
• Fast transaction times: Cross-border transactions are often subject to a stricter review process than transactions made within a country’s borders. Financial institutions often will often delay a transaction until this process is completed. The Ripple network can facilitate highly liquid transactions without the need for an institutional go-between, making it a much faster option to send money between countries. Further, the network can handle up to 1,500 transactions per second, settling each in less than 5 seconds.
• Partnerships with leading banks: As early as 2017, 100 financial institutions had joined the Ripple network, seeing value in the new, innovative cross-border payment model. These institutions included Santander, AMEX, Mitsubishi UFJ and more. Since then, Ripple has delivered on its promise to remove friction in cross-border payments. For example, Korean remittance provider, SentBe, saved its customers $25m in FX conversion and transaction fees with RippleNet. Similarly, Travelex Bank uses Ripple’s global payments network to settle cross-border payments almost instantly.
• Staying power: XRP has been in existence for 12 years, only three years shy of Bitcoin’s introduction to the public. While other altcoins have come and gone during these early days of crypto, XRP seems to have a considerable Lindy Effect, creating a staying power through every bear market it survives. Although past performance does not indicate future results, XRP’s ability to endure market swings is a feature that suggests it isn’t going away anytime soon.
• Eco-friendly: Because XRP uses a consensus protocol that requires relatively low computational power from its nodes, it can be considered a sustainable means of exchange. Ripple is also taking steps to become carbon neutral by 2030.

Disadvantages

• Circulating supply control: Compared to other crypto projects, which may release coins through mining or other methods, Ripple has more influence over the value of XRP, choosing when more coins are released. With Ripple controlling over 55% of the total XRP supply, one could argue that Ripple is the principal market maker for XRP, using the sales of the asset to maintain the XRP Ledger and Ripple’s other technologies. With Ripple controlling over 55% of the total XRP supply, is not far from plausible to some.
• Technically centralised: XRP was created and released by the privately-owned Ripple. The network also has a lower-than-average validator count. A low validator count is often correlated with higher centralisation, leading some to believe the blockchain is more centralised than decentralised. Additionally, Ripple, not network participants, decides whether validators are deemed trustworthy. Although the company uses blockchain technology, many argue that it still operates as a centralised entity. This goes against the core philosophy of most decentralised blockchains.

Who created XRP?

Way back in 2004, before Satoshi Nakamoto and Bitcoin, Ryan Fugger created Ripplepay. Ripplepay was in concept what Ripple is today—a network that facilitates cross-border transactions—just without blockchain technology.

After the launch of Bitcoin, three like-minded developers—David Schwartz, Jed McCaleb, and Arthur Britto—sought to build upon the idea of Bitcoin, creating a borderless cryptocurrency that didn’t need a significant amount of computing power for nodes to validate. They bought Ripplepay from Fugger and used the source code to create the XRP Ledger and, subsequently, XRP in 2012.

Upon launch, 80% of XRP tokens were gifted to a new company, which would eventually become known as Ripple. The remaining supply was sold to investors and financial institutions to fund further development of the project.

SEC v. Ripple

In 2020, the U.S. SEC filed a lawsuit against Ripple. The SEC accused the company of selling XRP as unregistered securities. In August 2025, Judge Analisa Torress of the US District Court for the Southern District of New York ruled that retail XRP transactions are not securities, while some institutional sales were ruled as securities transactions under U.S. law. Ripple was ordered to pay a US$50 million settlement, and a permanent injunction prohibits further institutional sales. The settlement was much lower than the U.S. SEC’s original US$125 million claim. Ripple and the U.S. SEC then withdrew their appeals, which formally closed the case.

The case saw many rulings throughout, both for and against Ripple. In July 2023, Ripple Labs Inc. achieved a landmark legal victory when a U.S. judge ruled that the company did not violate federal securities law by selling its XRP token on public exchanges. This decision boosted the value of XRP by 75% and may offer support to other crypto firms battling the SEC's jurisdiction.

The SEC then secured a partial win in the case as the judge determined that Ripple's marketing aimed at institutional investors promoted a speculative value proposition tied to the company's efforts, making it subject to securities regulations. Upon XRP’s launch, Ripple sold USD$728.9 million worth of XRP to hedge funds and sophisticated buyers. These transactions were ruled to be unregistered sales of securities.

The SEC lost an appeal against the July 2023 decision. Not long after, the SEC came up short again after its charges against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen were dismissed.

Litigation continued in 2024, with the SEC urging the New York legal system to impose a fine of nearly US$2 billion on Ripple for selling XRP to non-retail buyers outside of public exchanges. A Manhattan court later ordered Ripple Labs to pay around US$125 million in penalties, which was reduced to US$50 million in the final ruling, as outlined above.

SEC vs Ripple has become an important case in distinguishing retail crypto transactions from institutional sales. As U.S. regulators continue to establish a clear framework for crypto legislation, protracted “regulation through litigation” should be addressed as the operating parameters for similar firms becomes clearer.

How to buy in XRP (XRP) in 2026

Buying XRP

The easiest way to buy XRP is through a personal crypto brokerage like Caleb & Brown. We make purchasing XRP easy and accessible whether you use fiat currency or crypto. Trusted by over 35,000 investors across 100 countries, our dedicated team of experts works around the clock to carry out all your crypto trades. If you’re ready to dive in and make your first XRP purchase, open an account with us for free today.

Selling XRP

Selling your XRP with Caleb & Brown is as simple as buying. You can trade your XRP for any of the hundreds of assets available through our crypto brokerage.

Should you decide to exchange your XRP for fiat currency, there are $0 withdrawal fees.

Recommended reading: Common Crypto Investing Strategies Every Investor Should Know

How to store XRP

There are multiple ways of storing XRP, from a cold wallet, hot wallet or with a custodian. Individual risk tolerance and preferences will determine the method employed by most users.

Many of these storage methods can seem complex, especially if you are not tech-savvy. Caleb & Brown provides end-to-end custody solutions for hassle-free storage and peace of mind investing. We have a battle-tested security infrastructure through the leading asset security platform Fireblocks. All clients receive a free security consultation to ensure they follow security best practices.

Recommended reading: Crypto Security Part 1: Best Practices

FAQs

Is XRP a good investment?

Choosing to buy XRP depends largely on your investment goals. Investors also weigh a variety of factors before choosing a project to invest in. Ultimately, it’s up to you to determine whether you decide to invest in XRP and what strategies you use to maintain that investment.

At Caleb & Brown, we follow the facts, not opinions or trends. We encourage you to do your own independent research before making an investment. Our team of crypto experts are more than willing to answer any questions you have along the way.

Why does XRP have value?

XRP gets its value from various factors, but mostly from Ripple’s ability to work with financial institutions worldwide and from its ability to quickly and cost-effectively be exchanged for any currency or asset.

What is the average transaction fee on XRP?

XRP transaction fees cost $0.0002 per transaction on average.

What consensus mechanism does XRP use?

The network uses a consensus protocol that permissions certain servers it deems trustworthy to validate transactions.

Trade XRP with Caleb & Brown

Making your first XRP purchase doesn’t need to be complicated.

Caleb & Brown is the world's leading cryptocurrency brokerage for those looking to trade XRP or other digital assets.

Our personalised crypto broker service makes everything simple. A dedicated member of our team is always on hand to guide you along the way, giving you the confidence you need to navigate the world of crypto. Not to mention key features such as:

• No joining or signup costs
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If you are ready to take the next step and trade in XRP, contact your crypto broker today.

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