What is XRP?

XRP is a digital asset and cryptocurrency that serves as the native token of the XRP Ledger (XRPL), an open-source, decentralized blockchain technology. Created in 2012 by David Schwartz, Jed McCaleb, and Arthur Britto, XRP was specifically designed to facilitate fast, low-cost cross-border payments and financial transactions.

How XRP Works

Unlike Bitcoin, which relies on energy-intensive Proof-of-Work mining, XRP uses a unique consensus protocol called the XRP Ledger Consensus Protocol. This mechanism allows a network of independent validators to agree on the order and validity of XRP transactions in just 3–5 seconds, with transaction fees typically under $0.01.

The XRP Ledger can process approximately 1,500 transactions per second (TPS), making it one of the fastest blockchain networks in existence. For comparison, Bitcoin handles roughly 7 TPS, and Ethereum processes about 15–30 TPS on its base layer.

XRP's Total Supply

All 100 billion XRP tokens were created at the ledger's inception — no new XRP can ever be minted. This fixed supply model is fundamentally different from Bitcoin's ongoing mining process. A small amount of XRP is destroyed (burned) with each transaction as an anti-spam measure, making XRP slightly deflationary over time.

As of early 2025, approximately 57 billion XRP are in active circulation. The remaining tokens are held in Ripple's escrow accounts, which release up to 1 billion XRP per month, with unused portions being re-escrowed.

Key Features of XRP

• •Speed: Transactions settle in 3–5 seconds
• •Low Cost: Fees are typically fractions of a cent
• •Scalability: Handles ~1,500 transactions per second
• •Energy Efficient: No mining required, minimal energy consumption
• •Built-in DEX: The XRP Ledger includes a native decentralized exchange
• •Deflationary: Small amounts of XRP are burned with each transaction

XRP's Role in Global Finance

XRP was designed as a "bridge currency" for international payments. When a financial institution needs to send money from one country to another, XRP can serve as an intermediary asset, converting the sending currency to XRP and then to the receiving currency in seconds. This eliminates the need for pre-funded nostro/vostro accounts that traditional banks maintain globally.

Ripple's On-Demand Liquidity (ODL) product leverages XRP for this exact purpose, enabling real-time cross-border payments without the capital requirements of traditional correspondent banking.

XRP vs. Other Cryptocurrencies

While Bitcoin is often described as "digital gold" — a store of value — XRP positions itself as a utility token designed for moving value efficiently. Its speed, cost, and throughput advantages make it particularly suited for payments and financial infrastructure, rather than as a speculative investment vehicle alone.

Ready to buy your first XRP? Check out our Get Started guide for a step-by-step walkthrough.