What is XRP and how does it work?

International wire transfers can take days – but what if they didn’t have to?

Traditional banking is no longer the only way to move money across borders. Digital assets like XRP are being explored as potential tools to make global payments faster, more efficient, and less costly.

XRP cryptocurrency

This is what XRP is all about. Designed as a faster, cheaper alternative to traditional banking networks like SWIFT, XRP seeks to reduce the delays and high fees that have long plagued cross-border transactions. While SWIFT modernized banking by replacing outdated telex machines, XRP takes a different approach – offering near-instant, low-cost transfers on a decentralized network.

Launched in 2012, XRP is the native currency of the XRP Ledger (XRPL), a decentralized blockchain used for recording transactions and supporting apps.

Unlike blockchains like Bitcoin and Ethereum, which rely on energy-intensive mining or staking, XRP uses the Ripple Protocol Consensus Algorithm (RPCA). This system allows transactions to be confirmed quickly with minimal energy use.

With affordability and speed at its core, XRP has been trialed or adopted by financial institutions such as SBI Holdings in Japan and Tranglo in Southeast Asia for cross-border payments. However, adoption has varied, with some banks hesitant due to regulatory uncertainty, particularly in the U.S. It also serves as a bridge currency, offering firms and users a common unit when conducting cross-border transactions.

XRP has a max supply of 100 billion coins, with around 58 billion currently circulating. Its market cap fluctuates but remains among the top cryptocurrencies by value.

Ripple: The company behind XRP

XRP was created by Ripple’s founders, but the network operates independently. Ripple, however, remains its largest holder, with around 46 billion coins. All 100 billion XRP tokens were minted at launch, with a portion allocated to Ripple to support development and adoption efforts.

Ripple also operates RippleNet, a payment network built on XRPL that connects banks, payment providers, and digital asset exchanges to streamline global transfers. It enables real-time clearing, settlement, and messaging, reducing transaction delays.

Ripple has partnered with financial firms such as Instarem in Singapore and Tranglo in Malaysia to expand its reach

XRP and global transfers

XRP is not just another cryptocurrency – it is designed for speed, efficiency, and affordability in payments. By enabling near-instant transactions at low costs, it presents an alternative to traditional banking systems and other digital payment networks.

However, XRP has also faced regulatory challenges, particularly in the U.S., where the SEC has disputed its classification as a security. While Ripple has pushed back against these claims, the legal battle has influenced XRP’s adoption and market perception.

As demand for faster and cheaper cross-border payments grows, XRP is positioning itself as a contender – but its long-term role in the financial ecosystem will depend on regulatory developments and broader institutional adoption.