What is XRP?
XRP is a digital asset native to the XRP Ledger (XRPL), an open-source, decentralized blockchain purpose-built for payments. Created in 2012, XRP was designed to move money globally in seconds for fractions of a cent.
Disclaimer: This website is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
XRP Explained: The Basics
XRP is a cryptocurrency — a digital asset that uses cryptography and blockchain technology to enable secure, peer-to-peer transactions without intermediaries. But XRP isn't just another cryptocurrency. It was specifically engineered to solve one of the biggest problems in global finance: moving money across borders quickly and cheaply.
Today's international payment system relies on infrastructure built decades ago. Sending money from the United States to Japan through traditional banking channels can take 3-5 business days and cost $25-50 in fees. XRP completes the same transfer in 3-5 seconds for less than a fraction of a cent.
The XRP Ledger processes approximately 1,500 transactions per second — compared to Bitcoin's ~7 TPS and Ethereum's ~30 TPS. This throughput makes XRP practical for real-world payment applications at scale.
How Does XRP Work?
The XRP Ledger Consensus Protocol
Unlike Bitcoin, which uses energy-intensive proof-of-work (PoW) mining, the XRP Ledger uses a unique Federated Consensus Protocol. A network of independent validators agrees on the order and validity of XRP transactions every 3-5 seconds.
Fast
Transactions confirm in 3-5 seconds, not minutes or hours
Energy-efficient
No mining required — the XRPL uses 120,000x less energy than Bitcoin
Decentralized
Over 150 validators globally, with Ripple operating only ~6% of them
Reliable
The XRPL has operated continuously since 2012 with zero downtime, closing over 90 million ledgers
Bridge Currency for Cross-Border Payments
XRP's primary use case is as a bridge currency for international payments. A sender converts their local currency to XRP, the XRP is transferred across the XRPL in seconds, and the recipient's financial institution converts the XRP to their local currency. This eliminates the need for pre-funded nostro/vostro accounts — freeing up trillions of dollars currently locked in the global banking system.
Ripple's On-Demand Liquidity (ODL) product leverages this bridge currency function, enabling financial institutions to send cross-border payments without maintaining accounts in destination currencies.
Native Features of the XRP Ledger
Beyond simple payments, the XRPL includes powerful built-in features:
A built-in order book for trading any XRPL-issued asset
Time-locked and condition-based escrow contracts enforced by the protocol
Native NFT minting and trading since October 2022
Native Automated Market Maker functionality for decentralized liquidity
Issue stablecoins, CBDCs, and tokenized assets on the XRPL
Require multiple parties to authorize a transaction for security
XRP Tokenomics: Supply Breakdown
100 billion XRP were created when the XRP Ledger launched in 2012. This is a fixed, hard-capped supply — no new XRP can ever be minted. Approximately 33.9 billion XRP remains in Ripple's escrow system. Here's how the supply breaks down as of February 2026:
| Category | Amount | Details |
|---|---|---|
| Total Supply | 100B XRP | Fixed forever — no inflation |
| Circulating Supply | ~60B XRP | Available on the open market |
| In Escrow | ~33.9B XRP | Ripple's escrow system |
| Burned (Fees) | ~14.26M XRP | Permanently destroyed |
Every transaction on the XRPL burns a small amount of XRP (typically 0.00001 XRP) as a fee. These burned tokens are permanently destroyed, gradually reducing the total supply over time. Over 14 million XRP have been burned to date.
XRP vs. Bitcoin vs. Ethereum: How Do They Compare?
| Feature | XRP | Bitcoin | Ethereum |
|---|---|---|---|
| Settlement Time | 3-5 seconds | 10-60 minutes | 12-15 seconds |
| Transaction Fee | < $0.01 | $1-50+ | $0.50-100+ |
| Throughput | 1,500+ TPS | ~7 TPS | ~30 TPS |
| Consensus | Federated Consensus | Proof of Work | Proof of Stake |
| Total Supply | 100B (fixed) | 21M (capped) | ~120M (variable) |
| Primary Use Case | Payments & Bridging | Store of Value | Smart Contracts |
- Purpose-built for payments: While Bitcoin was designed as "digital gold" and Ethereum as a smart contract platform, XRP was engineered specifically for fast, low-cost value transfer.
- No mining: XRP uses Federated Consensus instead of energy-intensive proof-of-work mining — 120,000x less energy than Bitcoin.
- Pre-mined fixed supply: All 100 billion XRP existed from day one. Combined with the deflationary burn mechanism, XRP's supply only decreases over time.
- Enterprise adoption: Hundreds of financial institution partnerships and a company valued at $50 billion.
- Regulatory clarity: The 2023 Torres ruling established that XRP on exchanges is not a security — paving the way for ETF filings and institutional products.
What Are XRP's Use Cases?
Ripple's partner network spans 55+ countries. Through ODL, XRP serves as the bridge currency — eliminating the need for pre-funded accounts in destination currencies.
With Ripple's acquisition of Hidden Road (now Ripple Prime), over $3 trillion in annual clearing volume could eventually settle on the XRPL.
Ripple's RLUSD stablecoin (launched Dec 2024) operates on XRPL. Learn more about how RLUSD helps XRP in our dedicated guide.
The XRPL supports tokenization of real-world assets — real estate, gold, treasury bills. Partners like Archax, Meld Gold, and Zoniqx are building on XRPL.
Ripple is working with 20+ central banks globally on CBDC pilot programs. The XRPL's speed, low cost, and compliance features make it a natural platform.
With 3-5 second settlement and fees under $0.01, XRP is one of the most practical cryptocurrencies for daily use via the Xaman wallet.
Who Created XRP and the XRP Ledger?
The XRP Ledger was created by three developers: David Schwartz (now Ripple's CTO, known online as "JoelKatz"), Jed McCaleb (who later co-founded Stellar), and Arthur Britto. Development began in 2011 as they sought to build a faster, more energy-efficient alternative to Bitcoin.
The XRPL went live on June 2, 2012, with all 100 billion XRP created at genesis. Chris Larsen joined the team and together they formed OpenCoin (later renamed to Ripple) in September 2012.
The XRP Ledger was created before Ripple the company existed. The XRPL is open-source and decentralized — it would continue to operate even if Ripple ceased to exist. Learn about the team on our Ripple Leadership page.
How Does XRP's Escrow System Work?
55,000,000,000 XRP
Locked into cryptographically enforced escrow contracts on the XRP Ledger
Every month, up to 1 billion XRP unlocks automatically (enforced by the protocol), but Ripple typically re-escrows 60-80% immediately. Only 200-300 million XRP enters potential circulation each month. As of February 2026, approximately 33.9 billion XRP remains in escrow.
Read our comprehensive deep dive: XRP Escrow: The Complete Guide →
The SEC Case and Regulatory Clarity
In December 2020, the SEC sued Ripple Labs, alleging that XRP was an unregistered security. After years of litigation, Judge Analisa Torres ruled in July 2023 that XRP sold on public exchanges to retail investors is not a security. This was a landmark decision for the entire cryptocurrency industry.
In August 2024, Ripple was ordered to pay $125 million in civil penalties — far less than the SEC's original demand of nearly $2 billion. Following this clarity, major U.S. exchanges relisted XRP, and multiple firms filed for spot XRP ETFs.
Learn more in our complete history and timeline.
XRP in 2026 and Beyond
With the SEC case largely resolved, XRP is entering a new chapter. Key developments to watch:
XRP Spot ETFs
Multiple applications filed by Bitwise, Canary Capital, 21Shares, and WisdomTree
XRP Futures
Listed on CME with futures-based ETFs already trading
Institutional Adoption
Ripple's acquisition strategy creating full-stack financial infrastructure
RLUSD Growth
Stablecoin market cap surpassing $1.26 billion
Global Regulatory Clarity
Favorable regulations in the US, UK, Singapore, UAE, and beyond
Why Does XRP Matter?
The global cross-border payments market moves over $150 trillion annually, yet the infrastructure behind it is decades old. International wire transfers still take 3-5 business days, cost $25-50 in fees, and require trillions locked in pre-funded accounts. XRP was designed to fix this — offering settlement in seconds for fractions of a cent.
Beyond payments, XRP represents a shift toward an "Internet of Value" — a world where money moves as easily as information. With Ripple's growing institutional infrastructure, RLUSD stablecoin, and potential ETF products, XRP is positioned at the intersection of traditional finance and blockchain technology.
Common Mistakes to Avoid
“Ripple and XRP are the same thing”
Ripple is a company; XRP is a decentralized digital asset. They are related but distinct. XRP would continue to exist even if Ripple ceased operations.
“XRP has unlimited supply”
XRP has a fixed supply of 100 billion. No more can ever be created. It's actually deflationary — transaction fees permanently burn XRP.
“Escrow unlocks crash the price”
Monthly escrow unlocks are fully predictable and priced in. 60-80% is re-escrowed immediately. Only 200-300M enters potential circulation.
“You should store XRP only on exchanges”
For long-term holding, use a self-custody wallet like Xaman. 'Not your keys, not your crypto.'
“I can use all my XRP — the wallet reserve doesn't matter”
XRPL accounts require a 10 XRP reserve to activate. Factor this in when setting up a new wallet.
Frequently Asked Questions
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XRP is more than a cryptocurrency — it's the foundation of a new financial infrastructure being built by a $50 billion company with over 300 institutional partners. Ready to get started?
Last updated: February 10, 2026. Written by the AllAboutXRP Editorial Team. Sources: XRPL.org documentation, Ripple official announcements, CoinMarketCap, SEC court filings, XRPScan on-chain data.