What Is XRP (Ripple)?

XRP is a cryptocurrency that operates on the XRP Ledger, a decentralized blockchain designed to process transactions quickly and with relatively low network costs. It was created as part of an effort to facilitate global payments without relying on traditional financial infrastructure.

XRP and Ripple are related, but they aren’t the same thing. XRP is the native cryptocurrency of the XRP Ledger, while Ripple is a technology company that utilizes XRP to help banks quickly swap and send different global currencies. Ripple also issues its own U.S.dollar-backed stablecoin, Ripple USD (RLUSD), which is separate from XRP.

Understanding the difference between XRP, the XRP Ledger, and Ripple can help you understand how the cryptocurrency works and how it fits into the broader digital-asset landscape.

What Is XRP?

XRP is a cryptocurrency designed to facilitate the fast transfer of value, including across borders and between different currencies. It can be transferred directly between addresses on the XRP Ledger and can also serve as a bridge currency when exchanging different currencies or tokens.

XRP also functions as a standalone digital asset that is widely bought, sold, and swapped on major crypto exchanges and platforms. Like other cryptocurrencies, XRP’s price can rise and fall based on supply, demand, and other market factors.

Is XRP a Stablecoin?

No, XRP is not a stablecoin. Its price is not tied to a specific fiat currency, so its market price can fluctuate significantly.

Ripple does have a separate stablecoin called Ripple USD, or RLUSD. RLUSD is designed to maintain a value of $1 and is backed by reserves of cash and cash equivalents. It is issued through a Ripple subsidiary, Standard Custody & Trust Company, and is available on the XRP Ledger and other blockchains.

Is Ripple the Same as XRP?

No. Ripple and XRP are related but are not the same thing.

Ripple is a technology company that develops blockchain-based financial products and services, including Ripple Payments and RLUSD. XRP is the native cryptocurrency of the XRP Ledger, a decentralized blockchain that is not owned or controlled by Ripple. Ripple is one of the companies that contributes to the XRP Ledger’s development and ecosystem.

Who Created XRP? A Brief History

XRP’s roots go back to 2011, when David Schwartz, Jed McCaleb, and Arthur Britto began developing the XRP Ledger. Their goal was to create a blockchain that addressed the speed, cost, and energy limitations of Bitcoin.

The XRP Ledger launched in June 2012, with 100 billion XRP created at the outset. The protocol was designed so that no additional XRP would be created. In September 2012, the company that would become Ripple was founded. The company received 80 billion XRP from the founders to support the development of use cases around the digital asset.

XRP’s Supply and Distribution

A maximum of 100 billion XRP was created when the XRP Ledger launched, and no additional XRP can be created through mining or staking.

Ripple has historically held a substantial amount of XRP. Some of the company’s XRP has been placed in escrow, which releases tokens according to predetermined conditions. As of June 30, 2026, Ripple reported holding about 37.66 billion XRP, with 32.6 billion XRP placed in escrow. It also reported about 62.33 billion XRP as distributed.

Because all 100 billion XRP were created at the beginning, XRP is sometimes described as “pre-mined.” Technically, however, there is no ongoing mining process to create new XRP.

How Does XRP and the XRP Ledger Work?

The XRP Ledger is the blockchain network, while XRP is its native cryptocurrency. The ledger uses a consensus protocol rather than the proof-of-work or proof-of-stake systems used by some other blockchains.

The XRP Ledger Consensus Protocol

The XRP Ledger is a decentralized public blockchain maintained by a network of servers. Validators propose and verify transactions and work toward agreement on the order and outcome of transactions.

Unlike proof-of-work networks, the XRP Ledger does not require miners to compete to add transactions to the ledger. It also does not use staking to determine which validators can participate in consensus.

Validators and Unique Node Lists

Validators are servers that participate in the XRP Ledger’s consensus process. Each server can maintain its own list of validators it considers trustworthy, known as a Unique Node List, or UNL.

Validators generally reach consensus on transactions every three to five seconds. A validator’s proposals only influence consensus for other servers that have chosen to trust that validator through their UNL. This is one of the mechanisms the network uses to avoid relying on a single central authority.

Ripple operates one validator on the network, but the XRP Ledger is not controlled by Ripple. The network includes validators operated by other organizations and individuals, and participants can choose which validators they trust.

Transaction Speed, Fees, and Throughput

The XRP Ledger is designed to process transactions quickly. Its consensus process generally confirms transactions within three to five seconds. The network also requires a small amount of XRP to be destroyed with each transaction to help prevent spam and denial-of-service attacks.

The minimum network cost for a standard transaction is currently 10 drops (the smallest unit of XRP), or 0.00001 XRP, although the actual cost can increase when the network is under heavier load. The XRP used for the transaction cost is destroyed rather than paid to a validator.

The cost of using XRP through an exchange or other service can be different from the XRP Ledger’s network transaction cost.

How Is XRP Used in the Real World?

XRP has several potential and existing uses within the XRP Ledger ecosystem, particularly for payments, transfers, and exchanges between different assets.

Cross-Border Payments and Settlement

XRP can be used to transfer money across borders without requiring the sender and recipient to directly hold the same currency. Ripple also uses XRP in many of its payment solutions, although Ripple’s products may use other digital assets and payment methods depending on the transaction and jurisdiction.

The XRP Ledger itself allows XRP to be transferred directly between addresses and supports cross-currency payments.

XRP as a Bridge Currency

XRP can function as a bridge asset between different currencies or tokens. For example, a transaction can use XRP as an intermediary rather than requiring a direct trading pair between two specific assets.

This does not necessarily mean that banks or other financial institutions need to hold XRP as a reserve asset. Instead, XRP can potentially be used as part of a transaction or settlement process when liquidity and market access make that approach practical.

In addition, the XRP Ledger’s built-in decentralized exchange natively supports auto-bridging, a feature that automatically routes transactions through XRP if it provides a more efficient or cost-effective exchange path.

Micropayments

Because XRPL transactions typically cost a fraction of a cent and settle in three to five seconds, it can allow individuals and businesses to move tiny amounts of money efficiently without fees eating up the transfer amount.

Keep it mind, however, that the total end-to-end cost may be higher than the network fee. A user may also encounter fees charged by an exchange, payment provider, or other intermediary.

DeFi and Tokenization

The XRP Ledger supports a range of decentralized finance (DeFi) and tokenization functions. Its built-in decentralized exchange allows users to exchange XRP and other tokens, while its Automated Market Maker functionality provides another way to facilitate asset swaps and liquidity. The ledger also supports the issuance of tokenized assets and other financial applications.

XRP vs. Bitcoin and Other Cryptocurrencies

XRP differs from Bitcoin and other cryptocurrencies in several key ways.

Proof of Work vs XRP’s Consensus Model

Bitcoin uses proof of work, which relies on miners and computational work to secure the network and validate transactions. The XRP Ledger instead uses a consensus protocol in which validators agree on the order and outcome of transactions. As a result, XRP does not require mining or staking to process transactions on the XRP Ledger.

Mining vs. XRP’s Fixed Supply

Bitcoin is issued through a mining process, while XRP was created in its entirety when the XRP Ledger launched. No additional XRP can be created through mining. This means the XRP Ledger does not have a block-reward mining process that continually adds new XRP to the supply.

Energy Efficiency

Because the XRP Ledger does not rely on proof-of-work mining, it does not require the same type of computational competition used by Bitcoin’s network. This generally results in substantially lower energy requirements for transaction validation than proof-of-work systems. Ripple has also made commitments regarding reducing its environmental impact.

Decentralization and Governance

The XRP Ledger is a decentralized public blockchain maintained by a network of validators, and Ripple does not own or control the network. However, Ripple is a significant participant in the XRP ecosystem and contributes to the development of the XRP Ledger’s software and infrastructure.

The distinction is important: a company can be an influential contributor to a blockchain without being the entity that centrally controls the blockchain.

Pros and Cons of XRP

Like other cryptocurrencies, XRP has characteristics that may make it useful for some applications as well as risks and limitations that are important to understand.

Potential Advantages

One of XRP’s main design features is its ability to facilitate transactions quickly and with relatively low network costs. The XRP Ledger also natively supports cross-currency payments, a built-in decentralized exchange, and tokenized assets.

Another distinguishing feature is that the network does not depend on mining or staking to reach consensus. XRP’s fixed maximum supply also means that additional XRP cannot be created through mining.

Risks and Limitations

XRP has some limitations and risks to consider. Like many other cryptocurrencies, its price can fluctuate significantly, and there is no guarantee that it will maintain a particular price. Ripple’s control over a large portion of the XRP supply also raises some centralization concerns, since it gives one company significant influence over the token’s ecosystem and distribution.

In addition, using XRP can involve risks associated with cryptocurrency exchanges, wallets, private keys, crypto scams, regulatory changes, and technical failures.

Ripple and the SEC

Ripple was the subject of a major legal case brought by the U.S. Securities and Exchange Commission (SEC) in December 2020. The SEC alleged that Ripple and its executives had conducted unregistered offers and sales of XRP in violation of federal securities laws. Ripple disputed the allegations and argued, among other things, that XRP itself was not a security.

A July 2023 ruling by the U.S. District Court for the Southern District of New York distinguished between different ways XRP was sold. The court found that Ripple’s direct institutional sales of XRP under contracts constituted unregistered offers and sales of securities, while Ripple’s programmatic sales of XRP on digital asset trading platforms did not constitute securities sales under the circumstances considered by the court. The court did not find that XRP itself was inherently a security.

How the Case Was Resolved

In August 2024, the district court entered a final judgment imposing a roughly $125 million civil penalty against Ripple and an injunction concerning future violations of the securities-registration provisions.

In May 2025, the SEC and Ripple agreed to a proposed settlement framework that would have reduced the penalty to $50 million and dissolved the injunction. However, the district court rejected that request in June 2025.

In August 2025, the SEC and Ripple jointly dismissed their appeals in the Second Circuit, resolving the civil enforcement action. The district court’s final judgment, including the $125 million civil penalty and injunction, remained in effect.

What It Means for XRP Holders

The SEC’s 2026 interpretation provides additional clarity by identifying XRP as a digital commodity rather than a security. The interpretation also explains that a crypto asset that is not itself a security can still be involved in a transaction that is subject to federal securities laws if the transaction constitutes an investment contract.

For XRP users, this means the regulatory classification of XRP itself is clearer, although the legal treatment of particular transactions can depend on how the asset is offered or sold. Rules can also vary by jurisdiction and may change as cryptocurrency regulations develop.

How to Buy, Sell, and Store XRP

XRP is available through some crypto exchanges and financial institutions that offer cryptocurrency services. Here’s a look at how to buy, sell, and manage XRP.

How to Buy XRP

If a platform supports XRP, you generally can select XRP from the platform’s list of available cryptocurrencies and exchange U.S. dollars or another supported asset for it. Before completing a transaction, be sure to check the platform’s fees, exchange rate, withdrawal policies, and any applicable restrictions.

Keep in mind that availability of XRP can vary, depending on individual state regulations and the specific cryptocurrency platform you use.

How to Sell XRP

Selling XRP generally involves exchanging it for U.S. dollars, another cryptocurrency, or another supported asset through a platform that offers XRP transactions.

The exact amount you receive may differ from the quoted market price because of trading spreads, transaction fees, withdrawal fees, and other costs. In some cases, moving XRP from one platform to another may also involve a withdrawal or transfer fee.

How to Store XRP (Wallets and Custody)

You can store and manage XRP through an exchange, a third-party custodian, or a self-custody wallet. With an exchange-hosted wallet, the platform controls the private keys on your behalf. With a self-custody wallet, you are responsible for managing and protecting the private keys.

Self-custody options include software applications or hardware devices. Hardware wallets are physical devices that keep your private keys entirely isolated from internet-connected computers or phones when signing transactions.

Whichever method you use, it’s important to carefully protect private keys and recovery information. Losing access to the credentials needed to control a self-custody wallet can mean losing access to the XRP associated with it.

Is it Smart to Buy XRP?

Whether buying XRP is a smart decision depends entirely on your financial goals and tolerance for risk. XRP offers distinct advantages as an institutional payment network for cross-border transactions. However, it remains a high-risk, highly volatile digital asset that carries the real potential for total capital loss.

Like the broader cryptocurrency market, XRP is subject to dramatic price fluctuations. Its value is continuously influenced by shifting market sentiment, regulatory developments, technological updates, and global demand. Because of these inherent risks, you generally don’t want to buy XRP, or any cryptocurrency, with funds you cannot afford to lose entirely.

The Takeaway

XRP is the native cryptocurrency of the XRP Ledger, a decentralized blockchain designed for fast, low-cost transactions.. Ripple is a separate technology company that contributes to the XRP Ledger ecosystem and uses XRP and other digital assets in some of its financial products. Unlike Bitcoin, XRP isn’t minted; all 100 billion XRP were created with the XRP Ledger launched.

XRP can be used to transfer money, facilitate cross-currency transactions, and interact with applications on the XRP Ledger. Its fixed supply, consensus mechanism, transaction speed, and role in the broader XRP Ledger ecosystem distinguish it from other cryptocurrencies. Like other crypto assets, XRP also comes with consideration around price volatility, custody, and regulation.

SoFi Crypto is back. SoFi members can now buy, sell, and hold cryptocurrencies on a platform with the safeguards of a bank. Access 40+ cryptocurrencies, such as Bitcoin, Ethereum, and Solana, with the first national chartered bank to offer crypto trading. Now you can manage your banking, investing, borrowing, and crypto all in one place, giving you more control over your money.

Learn more about crypto trading with SoFi.

FAQ

Is XRP a stablecoin?

No. XRP is not a stablecoin and is not pegged to the U.S. dollar or another fiat currency. Its market price can fluctuate based on supply, demand, and other factors. Ripple, the technology company associated with XRP, does issue a separate stablecoin called Ripple USD (RLUSD). RLUSD is designed to maintain a value of $1 and is backed by reserves. XRP and RLUSD are separate digital assets with different purposes.

Can I Buy XRP on Any Exchange?

No. XRP isn’t available on every cryptocurrency exchange or financial platform. Availability can also vary by country, state and other jurisdictional requirements. If you’re considering a platform for XRP, check whether it supports XRP transactions in your location, as well as its fees, withdrawal policies, and other terms.

How Long Does an XRP Transaction Take?

An XRP Ledger transaction generally takes about three to five seconds to reach consensus and be confirmed. Actual timing can vary depending on the network and the platform being used. Transactions involving an exchange or other intermediary may take longer because the service may have its own processing, deposit or withdrawal procedures.

What Is the Average XRP Transaction Fee?

There isn’t a fixed average fee for XRP transactions because the network cost can change. The minimum transaction cost on the XRP Ledger is currently 0.00001 XRP, or 10 drops (the smallest unit of XRP). The fee is designed primarily to prevent spam and is destroyed rather than paid to validators. Exchanges and other platforms may charge additional fees when you buy, sell, or transfer XRP.

Why Does XRP Have Value?

XRP’s market price is determined by supply and demand in the markets where it is traded. XRP also has utility within the XRP Ledger, where it is used for transactions and can serve as a bridge asset between different currencies or tokens. The XRP Ledger also requires spending a small amount of XRP for transactions and certain other network functions. These features are part of what gives XRP a role within its ecosystem, but they do not guarantee any particular price.

What Consensus Mechanism Does XRP Use?

The XRP Ledger uses the XRP Ledger Consensus Protocol, which is a validator-based consensus mechanism. Validators agree on the order and outcome of transactions without relying on proof-of-work mining or proof-of-stake. Validators maintain Unique Node Lists (UNLs) containing other validators they consider trustworthy. The network generally reaches consensus on transactions within three to five seconds.

---

Photo credit: iStock/whitebalance.space

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.
This article is not intended to be legal advice. Please consult an attorney for advice.

SOCRYP-Q326-013