XRP (XRP)

XRP is a cryptocurrency that operates on the XRP Ledger, an open-source, decentralized blockchain originally designed to facilitate fast, low-cost cross-border payments and currency exchange. XRP is closely associated with Ripple Labs, a privately held financial-technology company that uses the XRP Ledger as the basis for payment and liquidity products marketed primarily to banks and other financial institutions, rather than individual retail users.¹ Unlike Bitcoin, XRP is not created through a proof-of-work mining process; instead, the entirety of XRP's 100-billion-token supply was created at the network's genesis, with a substantial portion subsequently placed into a series of time-locked escrow accounts controlled by Ripple and released incrementally over time. Transactions on the XRP Ledger are validated through the Ripple Protocol Consensus Algorithm (RPCA), a mechanism distinct from both proof-of-work and conventional proof-of-stake designs, allowing transactions to typically settle in approximately three to five seconds at a cost of a small fraction of a cent.¹²

Ticker	XRP
Category	Cryptocurrency
Website	https://ripple.com/currency/
Twitter	@Ripple
Reddit	https://www.reddit.com/r/ripple

XRP and the underlying XRP Ledger were created in 2012 by a team including Jed McCaleb, David Schwartz, and Arthur Britto, with the ledger's design intended to improve upon Bitcoin's transaction speed and energy consumption. The associated company, initially named OpenCoin and later renamed Ripple Labs, was subsequently led by Chris Larsen as chief executive officer and later by Brad Garlinghouse, who has served as Ripple's CEO since 2017.² XRP's most consequential episode came in December 2020, when the U.S. Securities and Exchange Commission filed a lawsuit against Ripple, Larsen, and Garlinghouse, alleging that the company had raised approximately $1.3 billion through an unregistered securities offering of XRP.²³ The litigation continued for more than four years, resulting in a mixed 2023 ruling, a subsequent $125 million penalty imposed on Ripple, and a full resolution in 2025 and early 2026 after the SEC, under new leadership following the change in U.S. presidential administrations, dropped its remaining appeal.⁴⁵⁶⁷

Garlinghouse disclosed in July 2026 that he and Ripple co-founder Chris Larsen had at one point seriously considered shutting Ripple down entirely and distributing the company's XRP holdings to shareholders rather than continuing to fight the SEC's lawsuit, a decision he said the two ultimately rejected because it would have cost hundreds of employees their jobs.⁸ By mid-2026, XRP had experienced substantial price volatility tied to developments in the litigation, alongside continued growth in Ripple's institutional banking partnerships, the 2024 launch of Ripple's own stablecoin, RLUSD, and renewed interest in potential U.S. exchange-traded funds holding XRP.⁴²

History

Origins and founding

The concept underlying the XRP Ledger originated with Ryan Fugger, who in 2004 developed an early precursor system called RipplePay, intended to allow individuals and communities to extend lines of credit to one another and make payments without relying on a traditional bank. In 2012, Jed McCaleb — who had earlier founded the Mt. Gox bitcoin exchange — along with Arthur Britto and David Schwartz, began developing a new digital-currency system intended to address perceived limitations of Bitcoin, including its comparatively slow transaction confirmation times and substantial energy consumption. The result was the XRP Ledger, alongside a company originally named OpenCoin, founded to develop payment and financial-infrastructure products built around the new ledger. OpenCoin was subsequently renamed Ripple Labs (later shortened simply to Ripple), and Chris Larsen, a co-founder of the company, served as its chief executive officer during its early years before Brad Garlinghouse, who joined Ripple in 2015, became CEO in 2017.²

At the XRP Ledger's creation, the entire eventual supply of 100 billion XRP tokens was generated at once, with Ripple Labs subsequently receiving a substantial share of this supply. To address concerns that Ripple could flood the market with XRP at will and thereby depress its price, the company placed 55 billion XRP into a series of cryptographically enforced escrow accounts in 2017, structured to release a maximum of 1 billion XRP per month, with any unused XRP from a given release returned to the back of the escrow queue for potential future release.

SEC lawsuit

On December 22, 2020, the U.S. Securities and Exchange Commission filed a civil lawsuit against Ripple Labs, along with Larsen and Garlinghouse personally, in the U.S. District Court for the Southern District of New York, alleging that the company had raised approximately $1.3 billion beginning in 2013 through the sale of XRP in what the SEC characterized as an unregistered securities offering.³ The complaint further alleged that Ripple had distributed billions of additional XRP in exchange for non-cash consideration, such as labor and market-making services, and that Larsen and Garlinghouse had personally sold approximately $600 million worth of XRP in unregistered transactions of their own.³ The SEC's core legal theory was that XRP itself constituted an investment contract, and therefore a security, subject to federal securities-registration requirements, a classification Ripple disputed throughout the litigation, arguing that XRP functioned more comparably to a currency or commodity than to a share of corporate equity.²³

Garlinghouse later stated that he had met with SEC staff on four separate occasions between 2017 and 2019 to discuss Ripple's use of XRP, without legal representation present, and that at no point during those meetings had SEC officials indicated that the agency viewed XRP as a security, a fact he cited as evidence that Ripple had been denied clear advance guidance before the agency ultimately sued the company.⁸² Garlinghouse also disclosed that the SEC had separately offered to settle its case against him personally — over XRP he had sold in his individual capacity — in exchange for a fine, while continuing to pursue its claims against Ripple itself; Garlinghouse said he declined this offer.²

The litigation proceeded for more than four years and involved numerous contested motions, the most significant of which were competing motions for summary judgment filed by Ripple and the SEC. In July 2023, Judge Analisa Torres issued a split ruling: she found that Ripple's direct sales of XRP to sophisticated institutional investors did constitute unregistered securities transactions, but that XRP sold through blind, programmatic transactions on public cryptocurrency exchanges did not meet the legal test for a security established under the U.S. Supreme Court's Howey Test, since retail buyers purchasing XRP on an exchange had no reasonable expectation of profit derived specifically from Ripple's managerial efforts in the way required for the token itself to qualify as an investment contract in that context.⁶² Judge Torres separately imposed a $125,035,150 civil penalty against Ripple in connection with its institutional XRP sales, which the company paid immediately from its existing cash reserves without selling any XRP to cover the fine.⁴⁵⁶

Both Ripple and the SEC initially pursued appeals of aspects of the 2023 ruling. Following a change in SEC leadership under the second Trump administration, which adopted a considerably more accommodating posture toward the cryptocurrency industry than its predecessor, the SEC agreed in 2025 to drop its remaining appeal, and the two sides reached a final settlement.⁸⁴² Garlinghouse publicly celebrated the resolution, describing the SEC's original suit as a "non-fraud, victimless lawsuit" that had wiped out billions of dollars of value from XRP holders, and characterizing the broader legal campaign against Ripple and other cryptocurrency firms during this period as a form of "lawfare."⁷ The litigation's final chapter came in early 2026, when the SEC formally dropped its remaining claims against Ripple, more than five years after the case was first filed.⁴

Near-shutdown disclosure

In July 2026, speaking at an appearance at the University of Kansas School of Business, Garlinghouse revealed publicly for the first time that he and Chris Larsen had, in the aftermath of the SEC's initial 2020 lawsuit, seriously weighed shutting Ripple down entirely and distributing the company's XRP holdings to its shareholders on a pro rata basis, effectively conceding the case by declaring that the company no longer held any XRP at all.⁸¹ Garlinghouse said that path would likely have been the easier option, given what he described as the U.S. government's "infinite power and resources" in such disputes, but that he and Larsen ultimately rejected it because doing so would have cost hundreds of Ripple employees their jobs.⁸¹ Garlinghouse estimated that Ripple's decision to fight the lawsuit rather than fold ultimately cost the company approximately $150 million in legal fees over the roughly four-year litigation, during which Ripple's U.S. business activities were substantially constrained.⁸¹

Technology

XRP Ledger and consensus mechanism

The XRP Ledger is a distributed, public blockchain that validates transactions using the Ripple Protocol Consensus Algorithm (RPCA), a Byzantine-fault-tolerant consensus mechanism distinct from both the proof-of-work system used by Bitcoin and the proof-of-stake systems used by many other blockchain networks. Rather than relying on economic competition among miners or token-based staking to select validators, RPCA relies on a set of independently operated validating nodes that each maintain a list of other nodes — known as a "unique node list" — that they trust not to collude in an effort to defraud the network; a proposed transaction is confirmed once a sufficient supermajority of validators reach agreement on its validity and ordering. This design allows the XRP Ledger to achieve transaction finality considerably faster than networks reliant on proof-of-work mining, typically confirming transactions in three to five seconds at a transaction cost of a small fraction of a single cent, in contrast to Bitcoin, whose transactions can take on the order of ten minutes to confirm and, at times, cost several dollars in network fees depending on prevailing network congestion.¹

Escrowed supply

Of the 100 billion XRP created at the network's genesis, a substantial share was retained by Ripple Labs, and in 2017 the company placed 55 billion XRP into a series of cryptographically enforced escrow contracts on the XRP Ledger itself, structured to release no more than 1 billion XRP into circulation per month. This mechanism was designed to provide the market with a transparent, verifiable, and predictable release schedule for Ripple's holdings, addressing concerns that the company could otherwise sell large quantities of XRP at will in a manner that could destabilize the token's price. XRP tokens not needed for the market in a given month are returned to a new escrow contract at the back of the queue rather than being immediately reintroduced to circulation, extending the escrow's effective lifespan.

RippleNet and On-Demand Liquidity

Ripple's core commercial product built on the XRP Ledger is RippleNet, a network of financial institutions using Ripple's software to facilitate cross-border payments and settlement. A key component of this offering, known as On-Demand Liquidity (ODL), uses XRP as a bridge currency to facilitate international money transfers, allowing a financial institution to convert a source currency into XRP, transfer the XRP across the network nearly instantaneously, and then convert it into the destination currency, avoiding the need for the institution to pre-fund and maintain separate nostro-vostro banking accounts in every currency corridor in which it operates — a capital-intensive practice common in traditional correspondent banking that Ripple's products are specifically designed to reduce or eliminate.¹

RLUSD stablecoin

In 2024, Ripple launched RLUSD, a U.S.-dollar-pegged stablecoin issued on both the XRP Ledger and the Ethereum blockchain, intended to complement Ripple's existing payment and liquidity products by providing institutional customers with a fully reserved, dollar-denominated digital asset that could be used alongside XRP within Ripple's broader product ecosystem, reflecting a wider industry trend of established cryptocurrency and payments companies launching their own regulated stablecoins.

Market history

XRP has traded on cryptocurrency markets since shortly after its creation, and reached an all-time high of approximately $3.84 in January 2018 during that period's broader cryptocurrency market bubble, before entering a prolonged, multi-year decline that was subsequently compounded by the uncertainty introduced by the SEC's December 2020 lawsuit, during which several major U.S. cryptocurrency exchanges temporarily suspended or restricted XRP trading pending clarity on the token's legal status.

XRP's price history since 2023 has closely tracked developments in the SEC litigation. Following Judge Torres's July 2023 ruling that programmatic XRP sales did not constitute securities transactions, XRP experienced a sharp price rally, and the token continued to exhibit substantial sensitivity to subsequent legal milestones throughout the following years. Reporting in early 2025 described XRP trading at approximately $2.55 at its high point around the time the SEC dropped its appeal, before subsequently declining to approximately $1.38 by late February 2026 amid a broader cryptocurrency-market downturn.⁶ Separately, coverage of the case's ultimate March 2026 dismissal described it as triggering the largest single-week percentage gain in XRP's trading history, with the token briefly touching $3.00 before settling to a level around $2.50.⁴ Commentators following the resolution noted several concrete effects on XRP's market structure, including renewed institutional investment following the removal of the token's legal overhang, restored full trading availability on U.S. cryptocurrency exchanges that had earlier delisted or restricted the token, a wave of newly filed applications from asset managers seeking to launch XRP-holding exchange-traded funds in the United States, and a series of previously delayed banking-partnership announcements from Ripple.⁴

By mid-2026, market commentary noted that XRP's medium-term price trajectory depended increasingly on Ripple's ongoing business execution — including continued growth in institutional adoption of RippleNet, On-Demand Liquidity, and RLUSD — rather than solely on further legal or regulatory catalysts, given that the core SEC litigation risk that had overhung the token for more than four years had, by that point, been fully resolved.⁴

Institutional adoption

Ripple has continued to expand XRP Ledger-based institutional partnerships and regulatory licensing internationally in the years following the resolution of its SEC litigation. Community commentary in mid-2026 noted that Ripple's U.S. business had substantially recovered from the disruption caused by the litigation, with the company reporting the successful acquisition of operating licenses across multiple jurisdictions, including a license from European Union regulators making Ripple compliant with the bloc's Markets in Crypto-Assets (MiCA) regulatory framework.⁸ Supporters of the network have pointed to continued growth in bank-led development activity on the XRP Ledger as evidence that institutional interest in XRP-based payment infrastructure persisted and, in some respects, deepened throughout the period of legal uncertainty, notwithstanding earlier predictions from XRP critics that the SEC's lawsuit would prove fatal to the project's institutional ambitions.⁸

Criticism

XRP and Ripple have faced sustained criticism on several fronts throughout the network's history, beyond the core legal dispute over the token's securities status. Critics have argued that the XRP Ledger's validator structure, and Ripple's outsized initial token allocation and continued influence over its escrowed supply, represent a meaningfully more centralized arrangement than that found in cryptocurrencies such as Bitcoin, whose supply was distributed entirely through open, permissionless mining from the network's inception, without any pre-allocated token reserve controlled by a single founding company. Ripple and its supporters have responded that the XRP Ledger's validator list has grown increasingly diverse and independent of Ripple's direct control over time, and that the company's escrow mechanism was specifically designed to provide market transparency and predictability regarding Ripple's own token releases, addressing rather than ignoring concerns about centralized supply control.

The SEC's underlying legal theory in its 2020 lawsuit — and the broader debate over whether XRP should properly be classified as a security or a currency/commodity — has itself remained a subject of debate even following the litigation's resolution, given that Judge Torres's 2023 ruling drew a distinction between institutional and programmatic XRP sales rather than issuing a single, unqualified determination covering all possible XRP transactions. Some legal commentators have noted that this bifurcated outcome leaves open questions about how future token-based securities-law disputes involving other cryptocurrencies might be resolved, even though Ripple and Garlinghouse have characterized the case's ultimate, full resolution in 2025 and 2026 as a definitive vindication establishing that XRP itself is not a security.⁴⁶²

Comparison with other cryptocurrencies

XRP is frequently distinguished from Bitcoin and Ethereum on the basis of its intended use case and underlying technical design. Whereas Bitcoin was conceived primarily as a decentralized, censorship-resistant store of value and medium of exchange operating entirely outside traditional financial institutions, and Ethereum was designed as a general-purpose platform for smart contracts and decentralized applications, XRP and the XRP Ledger were purpose-built from the outset to serve as settlement infrastructure for financial institutions, with Ripple explicitly marketing its products to banks and payment providers rather than to individual retail users seeking an alternative to conventional currency. Garlinghouse has drawn this distinction directly, describing XRP as functionally comparable to Bitcoin in its role as a freely tradable digital asset rather than to traditional company stock, while emphasizing that Ripple itself remains a distinct, privately held corporate entity whose equity — raised through venture-capital funding rounds in 2012, 2015, and 2016 — is entirely separate from XRP token ownership; owning XRP confers no ownership stake, voting rights, or other equity claim on Ripple Labs as a company.¹

This distinction was itself central to the SEC litigation's ultimate resolution, since the case turned substantially on whether purchasing XRP created the kind of investment relationship with Ripple's own managerial efforts that would bring the token within the scope of federal securities law, as opposed to functioning as an independent, freely tradable digital commodity whose value depended on broader market and adoption dynamics rather than a direct claim on Ripple's corporate performance.

References