What Is XRP? | Bankrate

XRP, created by Ripple, has gained significant traction in the cryptocurrency market due to its speed, efficiency and use in cross-border payments. Unlike Bitcoin, which primarily serves as a store of value, XRP was designed to facilitate quick and cost-effective transactions.

Here’s everything you need to know about what XRP is, how it works and why it’s become one of the most popular cryptocurrencies on the market.

What is XRP?

Launched in 2012, XRP is a cryptocurrency created to improve global payments. XRP serves as a bridge currency that allows financial institutions to transfer money across borders with minimal fees and almost instant settlement times.

XRP serves a dual purpose: Investors use XRP to profit from market fluctuations, while Ripple (a digital payment company from the same founders) integrates XRP into its payment platform to facilitate transactions between financial institutions and businesses.

Instead of traditional transaction fees, XRP utilizes a burning mechanism, where a tiny fraction of XRP is destroyed with each transaction.

Following a low point on July 7, 2024, XRP has experienced a nearly 500 percent increase as of March 26, 2025. Its surge has been driven by several factors including:

• A general cryptocurrency market rally after President Donald Trump’s re-election;
• Possible inclusion in a national cryptocurrency reserve, which has since been rescinded;
• Expanding network utilization;
• Hopes of XRP exchange-traded funds (ETFs) being approved in 2025.

On March 26, XRP had a market cap of $140 billion, according to CoinMarketCap, making it one of the most popular cryptocurrencies in the world. There are more than 58 billion coins in circulation with a total supply of close to 100 billion.

Are XRP and Ripple the same thing?

XRP and Ripple are often used interchangeably, but they refer to different things. XRP is the open-source digital asset itself, designed for fast and cost-effective transactions. Ripple, on the other hand, is the company behind XRP and the RippleNet payment network.

Ripple’s blockchain-based digital payment network utilizes XRP as its native cryptocurrency to facilitate transactions. The XRP Ledger (XRPL) is a decentralized public blockchain and the underlying technology that records all XRP transactions. Although Ripple has rebranded multiple times throughout its evolution, the ticker symbol XRP has always denoted its cryptocurrency.

In other words, XRP exists independently and can be used by anyone without requiring involvement from Ripple. So while Ripple utilizes XRP within its ecosystem, the two are distinct entities.

History of XRP

The XRP Ledger — launched in 2012 by three developers, Jed McCaleb, David Schwartz and Arthur Britto — introduced XRP as its native token with the goal of enabling efficient global transactions. Chris Larsen joined shortly after, and together they established the company that eventually became Ripple.

While sharing Bitcoin’s goal of streamlined international transactions, the XRP Ledger focused on serving businesses and Ripple remained a key developer of the open-source ledger.

By 2017, XRP saw a sharp price increase, drawing widespread attention from investors and financial institutions. The momentum continued as RippleNet expanded its reach, forming partnerships with major banks and payment providers, including Santander and American Express.

In 2020, the XRP Ledger Foundation was created with financial support from Ripple and other entities to support the development and adoption of the ledger.

Ripple also drew scrutiny from the U.S. Securities and Exchange Commission (SEC) in 2020. The SEC filed a lawsuit against Ripple, alleging XRP was being sold as an unregistered security. The lawsuit caused major U.S.-based exchanges to delist or suspend XRP trading, leading to a price slump and uncertainty over the asset’s regulatory future.

The suit took a turn in 2023 when a court ruled XRP was not a security when sold on public cryptocurrency exchanges like Coinbase. This partial victory for Ripple helped boost investor confidence and led to a recovery in XRP’s market position.

Characteristics and features of XRP

Here are the main features that distinguish XRP from other cryptocurrencies.

XRP vs. Bitcoin

While Bitcoin was designed as a decentralized alternative to traditional money, XRP was developed to work with banks, aiming to improve and streamline existing financial systems.

Here are some of the other major differences between Bitcoin and XRP.

• Transaction speed: XRP transactions settle within three to five seconds, while Bitcoin transactions can take anywhere from 10 minutes to an hour.
• Transaction cost: Sending XRP typically costs less than a cent, while Bitcoin transaction fees can be much higher, especially when the network is busy. 
• Consensus mechanism: XRP relies on a consensus protocol with independent validators, while Bitcoin uses proof-of-work, which requires resource-intensive mining.
• Supply limit: XRP has a fixed supply of 100 billion coins, all pre-mined, whereas Bitcoin has a maximum supply of 21 million coins, which are mined over time.
• Energy consumption: XRP’s consensus mechanism is energy-efficient since it doesn’t require mining, while Bitcoin’s system consumes a huge amount of energy.

These differences make XRP better suited for high-speed, cost-effective transactions. Bitcoin, on the other hand, is often seen as a long-term investment and an alternative to traditional money.

Bottom line

Despite regulatory hurdles, XRP’s adoption and use cases continue to grow. Unlike Bitcoin, which is viewed as “digital gold,” XRP is designed to work within financial institutions to enhance international payments.

Whether you’re an investor or just curious about blockchain technology, XRP is a digital asset worth keeping an eye on.