XRP is the native digital asset of the XRP Ledger (XRPL), an open-source, decentralized blockchain that was launched in June 2012. XRP was designed from the outset as a bridge currency for fast, low-cost international money transfers, enabling financial institutions and payment providers to move value across borders in seconds rather than days.

The History of XRP and Ripple

The XRP Ledger was created in 2011–2012 by David Schwartz, Jed McCaleb, and Arthur Britto, who were inspired by Bitcoin but wanted to build a more efficient alternative. In September 2012, they co-founded OpenCoin (later renamed Ripple Labs, then simply Ripple) with Chris Larsen. The founders gifted 80 billion of the 100 billion total XRP tokens to Ripple to fund development and operations. The XRP Ledger went live in June 2012, and the company has been building financial products and partnerships on top of it ever since.

How the XRP Ledger Works

Unlike Bitcoin and Ethereum, the XRP Ledger does not use Proof of Work or Proof of Stake as its consensus mechanism. Instead, it uses a unique Federated Consensus protocol, where a set of trusted validator nodes — universities, exchanges, businesses, and individuals — agree on the correct order and outcome of transactions. There are currently over 150 validators on the ledger. Transactions on the XRPL typically settle in 3–5 seconds and cost a fraction of a cent (the minimum transaction fee is 0.00001 XRP, or 10 drops). The XRPL currently processes up to approximately 1,500 transactions per second.

XRP Use Cases: Payments, DeFi, and Tokenization

XRP's primary use case is facilitating cross-border payments through Ripple's On-Demand Liquidity (ODL) product, which uses XRP as a bridge currency to eliminate the need for pre-funded nostro accounts in international correspondent banking. Beyond payments, the XRP Ledger features a built-in decentralized exchange (DEX) that allows for the trading of any tokenized asset without intermediaries. In 2025, Ripple launched the RLUSD stablecoin on the XRPL, further expanding the ledger's utility as a DeFi and settlement infrastructure.

XRP and Ripple: What Is the Difference?

A common source of confusion is the relationship between XRP (the token) and Ripple (the company). XRP is an open-source digital asset that operates independently on the XRP Ledger — it does not require Ripple's involvement or approval to function. Ripple Labs is a private company that holds a large amount of XRP and builds commercial products using the XRPL, but the ledger itself is maintained by a decentralized network of validators around the world. Ripple has acknowledged this distinction and has publicly supported the narrative that XRP is a utility token independent of the company.