Ripple is a financial technology company that uses blockchain to improve how money moves across borders. Traditional international payments often involve several intermediaries, leading to delays, high fees, and security risks. Ripple’s blockchain-based solutions simplify the process, enabling faster, cheaper, and more secure transactions. Its technology offers financial institutions a modern alternative to the slow and costly methods used in traditional correspondent banking.
Ripple’s impact goes beyond payments. Its solutions are being adopted by banks, payment providers, and businesses aiming to integrate blockchain into their operations. At the centre of Ripple’s ecosystem is XRP—a digital asset that acts as a bridge between different currencies, helping to move value quickly and efficiently across networks.
With its growing network and the support of XRP, Ripple is playing an increasingly influential role in shaping the future of digital finance.
The Origin of Ripple
In 2011, engineers David Schwartz and Jed McCaleb recognised that Bitcoin’s design, while revolutionary, suffered from significant limitations such as high energy consumption and slow transaction times. Motivated to use blockchain technology to fill the need for a more efficient payments infrastructure, they began working on an alternative model that could enable traditional financial institutions to conduct fast and energy-efficient payments.
By September 2012, their vision had come to life as OpenCoin, and later rebranded as Ripple Labs. The primary goal was to build a global payment network that could bypass the cumbersome, high-fee, and slow processes of traditional banking systems. Ripple’s approach centred on a consensus algorithm that eliminated the need for energy-intensive mining but provided fast, secure and efficient cross-border transactions.
What is XRPL?
The XRP Ledger (XRPL), also known as the Ripple Protocol, is a decentralised, open-source blockchain designed to power fast, secure global payments. It underpins Ripple Payments (formerly RippleNet), a system trusted by major financial institutions to move money across borders in real time.
At the core of the network is XRP, the ledger’s native digital asset. Acting as a bridge currency, XRP allows users to send international payments that settle in just 3 to 5 seconds, dramatically reducing the delays and costs associated with traditional banking rails.
This speed is made possible by XRPL’s unique consensus mechanism, which relies on a network of 182 independent validators rather than energy-hungry mining. The result is ultra-fast, environmentally friendly transaction finality, typically within 3-5 seconds.
But XRPL is more than just a payments system. It also supports tokenisation through a built-in feature called Issued Currencies, enabling anyone to create and manage digital assets, such as fiat-backed stablecoins, directly on the ledger. This makes it easy for institutions to issue and transfer tokenised value efficiently.
Additionally, with the integration of the XLS-20 standard, the XRP Ledger now offers native support for non-fungible tokens (NFTs). Developers can mint, manage, and trade unique digital assets without relying on external smart contracts, expanding XRPL’s role within the broader digital asset ecosystem.
Key Features of XRPL:
- Decentralisation: Maintained by a global network of over 120 validators—including universities, exchanges, businesses, and individuals—XRPL ensures a distributed and resilient infrastructure.
- Consensus Protocol: Utilising a unique consensus mechanism, XRPL achieves transaction finality in 3 to 5 seconds without the need for Proof-of-Work validation.
- Native Digital Asset: XRP enables seamless cross-border transactions and acts as a bridge currency between different fiat currencies.
- Tokenisation: XRPL supports the issuance of various digital assets, including stablecoins, NFTs, and Central Bank Digital Currencies (CBDCs).
- Decentralised Exchange: Built directly into the blockchain, XRPL's DEX allows for the trading of multiple currencies and assets, enabling users access to decentralised finance (DeFi) applications.
- Energy Efficiency: XRPL is designed to be environmentally friendly, consuming minimal energy per transaction.
What is XRP Digital Asset?
XRP is both a cryptocurrency and a digital asset, serving as the native token of the XRP Ledger. Its primary function is as a bridge currency, enabling fast, seamless cross-border transactions and instant conversion between different fiat currencies. Instead of holding reserves in multiple foreign currencies, financial institutions can simply hold XRP—exchanging it on demand for any currency they need. This greatly simplifies global liquidity management.
Traditionally, banks have relied on nostro accounts, pre-funded foreign currency accounts held with partner banks, to process international payments. These accounts lock up capital and require constant oversight. By replacing them with XRP, institutions can eliminate the need for pre-funding, dramatically cutting costs and improving the efficiency of global money movement.
XRP’s utility also extends beyond international payments. It’s used in a variety of financial applications, including as collateral in trading and as a liquidity asset in decentralised finance (DeFi) protocols.
Transactions on the XRP Ledger are not only fast, they’re also extremely low-cost, averaging around $0.0002 per transaction. This stands in stark contrast to traditional payment systems like SWIFT, where transactions can incur multiple fees from sending banks, intermediaries, and receiving institutions.
How is XRP Different from Stablecoins?
XRP and stablecoins like USD Coin (USDC) or Tether (USDT) serve different roles in the digital asset space. Stablecoins maintain a fixed value by pegging to fiat currencies, making them ideal for trading, payments, and remittances without exposure to volatility. Stablecoins rely on centralised issuers to back their reserves, ensuring stability but also introducing counterparty risk. XRP, on the other hand, is a decentralised asset with a market-driven price designed to work on its native blockchain and facilitate cross-border payments.
While stablecoins offer stability for settlements, XRP acts as a bridge currency, enabling seamless value transfers between different fiat currencies and reducing reliance on traditional banking rails, such as SWIFT.
What is RLUSD?
In December 2024, Ripple launched Ripple USD (RLUSD), a fully regulated stablecoin backed 1:1 by U.S. dollar deposits, short-term Treasuries, and other cash equivalents. Approved by the New York Department of Financial Services, RLUSD runs on both the XRP Ledger and Ethereum, offering flexibility for a wide range of financial applications—from cross-border payments to DeFi.
Ripple's XRP offers a stark contrast to Bitcoin in terms of transaction fees. As of April 2025, XRP's average transaction fee is approximately $0.0002, significantly lower than Bitcoin's average fee of around $1.09. This disparity becomes even more pronounced when considering historical peaks. On June 8, 2024, Bitcoin's average transaction fee surged to an all-time high of $195, driven by network congestion and increased demand for block space.
Such fluctuations highlight XRP's consistent low-cost advantage, making it an attractive option for users seeking efficient and affordable cross-border transactions. The advisory board features financial heavyweights like Sheila Bair (former FDIC Chair) and David Puth (ex-CEO of Centre), underscoring Ripple’s ambition to position RLUSD as a trusted tool for institutional finance.
Ripple and Central Bank Digital Currencies
Ripple has positioned itself as a strategic partner for governments and monetary authorities exploring Central Bank Digital Currencies (CBDCs)—digital representations of national currencies issued and governed by central banks.
Through its Ripple CBDC Platform, the company supports the development and testing of sovereign digital currencies by offering secure, scalable infrastructure built on the XRP Ledger. Ripple has engaged in pilot projects and collaborations with institutions such as the Royal Monetary Authority of Bhutan and the Republic of Palau, aiming to improve cross-border payments and financial inclusion.
As regulatory scrutiny of digital assets continues to evolve, Ripple has sought greater legal clarity through ongoing engagement with regulators. Notably, the company secured a partial legal victory in its long-standing case with the U.S. Securities and Exchange Commission in 2023, contributing to its growing credibility in discussions around institutional use of blockchain.
This regulatory progress, combined with its technical maturity, positions Ripple as a prominent player in the future of public-private collaboration on digital currencies.
- Customised Solutions: Ripple provides a robust CBDC platform that enables central banks to issue and manage digital currencies throughout their entire lifecycle. The platform is built on a private ledger derived from the XRP Ledger (XRPL), ensuring a secure and controlled environment for CBDC operations.
- Interoperability: Utilising XRP as a bridge asset, Ripple's platform ensures seamless interoperability between different CBDCs and traditional financial systems, facilitating fast cross-border transactions.
- Technical Expertise: Ripple has conducted CBDC pilot projects with countries such as Bhutan, Palau, Montenegro, and Georgia.
Ripple’s Impact on Global Remittances
Ripple was established with a goal to modernise the global remittance system by addressing long-standing challenges such as high fees, slow processing times, and outdated infrastructure. By leveraging blockchain technology and its native digital asset XRP, Ripple enables real-time, low-cost cross-border payments that benefit both financial institutions and end users, especially in underserved regions.
Ripple’s global network now includes over 100 financial institutions, ranging from major banks to digital-first payment providers. A recent example is its partnership with Onafriq, a pan-African fintech firm. This collaboration created new remittance corridors between 27 African countries and regions like the UK, Australia, and the Gulf, expanding financial access through over 1,300 mobile wallet connections.
Ripple has also collaborated with key players in the remittance space:
- MoneyGram: Ripple invested $30 million in MoneyGram in 2019 to support XRP-based cross-border payments. Although the partnership ended in 2021 due to regulatory uncertainty in the U.S., it demonstrated the potential for blockchain in mainstream remittances.
- Siam Commercial Bank (SCB): Thailand’s oldest bank uses Ripple to power real-time, low-cost transfers through its SCB Easy app, improving accessibility for customers across multiple countries.
- Banco Santander: The multinational bank launched One Pay FX using Ripple’s technology, enabling faster and more transparent international transfers with clear fees and exchange rates.
- Krungsri: Also known as Bank of Ayudhya, Krungsri is one of Thailand’s largest banks. By joining RippleNet, it aims to boost the efficiency and speed of its international remittance services.
- TransferGo: A UK-based digital remittance provider, TransferGo uses RippleNet to deliver fast and affordable transfers, particularly aiding Indian migrant workers in Europe.
Through these partnerships, Ripple continues to play a central role in upgrading the infrastructure behind global payments, making them faster, cheaper, and more inclusive.
The Environmental Impact of Ripple
Sustainability is a key focus for Ripple. Unlike proof-of-work systems such as Bitcoin, Ripple’s consensus algorithm is energy-efficient, consuming only a fraction of the energy used by traditional blockchain networks.
- Carbon Neutrality: Ripple has committed to becoming carbon neutral by 2030.
- Partnerships: Ripple collaborates with organisations such as the Energy Web Foundation to advance renewable energy solutions for blockchain.
- Efficiency: Ripple Payment’s low-energy consumption ensures that its solutions are both cost-effective and environmentally friendly.
Ripple’s technology not only facilitates instant cross-border transactions but also supports tokenisation, stablecoins, and CBDC deployment—all within an environmentally conscious framework.
As Ripple continues to expand its global partnerships and develop solutions for financial institutions, central banks and remittance providers, it’s aiming to position itself at the centre of a rapidly evolving financial ecosystem. Whether through improving remittance corridors, streamlining liquidity, or enabling sovereign digital currencies, Ripple’s vision is to actively shape the future of global finance by adding blockchain rails to an already established landscape.
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