How Banks Use XRP
Over 300 financial institutions across 55+ countries use Ripple's technology for cross-border payments. Here's exactly how XRP fits into the global banking system — from RippleNet to On-Demand Liquidity.
Banks use XRP through Ripple's On-Demand Liquidity (ODL) product as a bridge currency for cross-border payments. Instead of pre-funding accounts in every destination currency, banks convert to XRP, transfer in 3-5 seconds, and convert to local currency — saving 40-60% vs traditional methods. Over 300 institutions across 55+ countries are connected through RippleNet.
| Key Facts | |
|---|---|
| Partner Institutions | 300+ across 55+ countries |
| Settlement Time | 3-5 seconds |
| Cost Savings | 40-60% vs traditional |
| Key Product | On-Demand Liquidity (ODL) |
| Annual Volume (Hidden Road) | $3 trillion+ |
| SWIFT Comparison | 1-5 business days |
The Problem: Why Cross-Border Payments Are Broken
The global cross-border payments market moves over $150 trillion annually, yet the infrastructure behind it is decades old. When a bank in the US sends money to a bank in Japan, the payment doesn't go directly. It passes through multiple intermediary (correspondent) banks, each taking a fee and adding delay.
$27 Trillion
Locked in pre-funded nostro/vostro accounts globally — capital that could be deployed elsewhere
Banks must maintain pre-funded accounts (nostro/vostro accounts) in every currency they transact in. A US bank sending payments to 50 countries needs pre-funded accounts in 50 currencies. This locks up trillions of dollars in idle capital worldwide.
Slow
International wire transfers take 1-5 business days
Expensive
Fees of $25-50+ per transaction, plus FX spreads
Capital-intensive
$27 trillion locked in pre-funded accounts globally
Opaque
Limited visibility into payment status during transit
Error-prone
Failed payments, returns, and compliance issues add costs
RippleNet: The Global Payment Network
RippleNet is Ripple's global payment network connecting banks, payment providers, and financial institutions. It provides a standardized protocol for sending and receiving cross-border payments with real-time settlement, end-to-end tracking, and guaranteed delivery.
Payments settle in seconds, not days — with guaranteed finality
Full visibility into payment status from initiation to delivery
Payments are validated before sending — eliminating failed transactions
Attach invoices, compliance data, and remittance information to payments
RippleNet has three tiers: messaging (payment instructions), settlement (clearing and settling), and On-Demand Liquidity (using XRP as a bridge currency). Banks can start with messaging and graduate to ODL as they gain confidence.
On-Demand Liquidity (ODL): How XRP Powers Bank Payments
On-Demand Liquidity is where XRP directly enters the banking equation. Here's how a typical ODL transaction works:
Step 1: Initiation
Bank A in the US initiates a $100,000 payment to Bank B in Japan through RippleNet
Step 2: Convert to XRP
The $100,000 is converted to XRP on a local exchange in seconds
Step 3: Transfer
XRP is transferred across the XRP Ledger to Japan in 3-5 seconds
Step 4: Convert to JPY
XRP is converted to Japanese Yen on a local exchange in Japan
Step 5: Delivery
Bank B receives the equivalent in JPY — total time: under 10 seconds
ODL eliminates the need for pre-funded accounts. Instead of Bank A maintaining a JPY account in Japan with millions of dollars idle, XRP serves as the real-time bridge. The bank only needs local currency and XRP handles the rest. This frees up massive amounts of capital.
Major Bank and Institutional Partners
Ripple's partner network includes some of the world's largest financial institutions:
| Institution | Country/Region | Relationship |
|---|---|---|
| SBI Holdings | Japan | Strategic partner; SBI Remit uses ODL |
| Santander | Spain/Global | One Pay FX powered by RippleNet |
| Standard Chartered | UK/Global | RippleNet partner for payments |
| Tranglo | Asia-Pacific | ODL partner (Ripple-owned stake) |
| SBI Remit | Japan | ODL for Philippines-Japan corridor |
| National Bank of Egypt | Egypt | RippleNet for remittances |
| Saudi British Bank | Saudi Arabia | RippleNet instant payments |
| Bank of America | United States | Ripple partner (patents + RippleNet) |
| Hidden Road | Global | Acquired by Ripple; $3T annual volume |
| Banco Rendimento | Brazil | ODL for Brazil corridors |
This is a partial list — Ripple has over 300 financial institution partnerships across 55+ countries, with new partners joining regularly. The acquisition of Hidden Road in 2025 added a prime brokerage with $3 trillion in annual clearing volume, significantly expanding Ripple's institutional reach.
XRP vs SWIFT: A Direct Comparison
SWIFT (Society for Worldwide Interbank Financial Telecommunication) has been the backbone of international banking since 1973. Here's how it compares to XRP-powered payments:
| Feature | XRP / RippleNet | SWIFT |
|---|---|---|
| Settlement Time | 3-5 seconds | 1-5 business days |
| Transaction Cost | < $0.01 (network fee) | $25-50+ per transfer |
| Intermediaries | None (direct) | 1-4 correspondent banks |
| Pre-Funded Accounts | Not required (ODL) | Required in every currency |
| Tracking | Real-time, end-to-end | Limited (SWIFT gpi improving) |
| Payment Validation | Pre-validated | Failures discovered after sending |
| Operating Hours | 24/7/365 | Business hours (banking days) |
| Rich Data | Native support | Limited (MT103 format) |
Ripple doesn't position itself as a "SWIFT killer." Many RippleNet partners still use SWIFT for some transactions. The goal is to offer a better option for specific corridors — especially high-volume, time-sensitive routes where speed and cost matter most. Over time, as banks experience the benefits, usage expands organically.
Real-World Payment Corridors Using XRP
ODL is live in numerous corridors, with particularly strong adoption in Asia-Pacific and Latin America:
SBI Remit uses ODL for one of the world's largest remittance corridors
High-volume corridor leveraging XRP for near-instant settlement
Multiple corridors connecting Australia to SE Asian markets
Banco Rendimento using ODL for Brazil's international payments
Saudi Arabia, UAE corridors serving massive migrant remittance flows
Growing corridors connecting European banks to African markets
Cost Savings for Banks Using XRP
The financial benefits for banks adopting ODL are substantial:
40-60% Lower Transaction Costs
Eliminating intermediary banks and their fees dramatically reduces per-payment costs
Capital Liberation
No pre-funded nostro/vostro accounts means billions freed for lending, investment, or operations
Reduced FX Spread
XRP's deep liquidity pools and real-time conversion minimize foreign exchange spreads
Fewer Failed Payments
Pre-validation eliminates the cost of failed, returned, or stuck payments
24/7 Operations
No more waiting for banking hours — payments settle any time, weekends and holidays included
$10+ Billion
Potential industry-wide savings if major corridors migrate to ODL-based settlement
Frequently Asked Questions
Sources
- • Ripple.com/solutions — RippleNet and ODL documentation
- • Ripple Case Studies — Partner success stories
- • SWIFT.com — SWIFT network data
- • McKinsey Global Payments Report — Cross-border payment market data
- • XRPL.org — XRP Ledger documentation
Continue Learning
Explore XRP's Institutional Impact
XRP is transforming how banks move money globally. Dive deeper into Ripple's technology, partnerships, and the future of cross-border payments.
Last updated: February 13, 2026. Written by the AllAboutXRP Editorial Team. Sources: Ripple.com, SWIFT.com, McKinsey Global Payments Report, XRPL.org.
Get XRP insights delivered weekly
Free weekly newsletter. No spam, unsubscribe anytime.