What is XRP? Complete Guide to Ripple’s Cryptocurrency

Last Updated: February 21, 2026

XRP is a digital asset and cryptocurrency native to the XRP Ledger, a decentralized blockchain launched in 2012 and designed for fast, low-cost cross-border payments. XRP ranks among the top five cryptocurrencies by market capitalization and settles transactions in 3–5 seconds.

XRP occupies a distinct position in the cryptocurrency market. Unlike Bitcoin, which was created as a peer-to-peer electronic cash system, or Ethereum, which powers decentralized applications through smart contracts, XRP was built specifically to move value across borders quickly and cheaply. The XRP Ledger processes transactions in 3–5 seconds at a cost below $0.01 — typically around $0.0002 per transaction — making it one of the fastest and least expensive major blockchain networks in operation (XRP Ledger Foundation, 2026). The network has processed over 2.8 billion transactions since its 2012 launch without a single hour of downtime.

As of February 2026, XRP ranks #4 by market capitalization with approximately 61 billion XRP in circulation out of a fixed maximum supply of 100 billion tokens (CoinMarketCap, February 2026). The asset reached an all-time high of $3.65 on July 18, 2025, fueled by regulatory clarity from the SEC lawsuit resolution and the launch of XRP exchange-traded funds in the United States. The asset gained that regulatory clarity in 2025 when the SEC settled its four-year lawsuit against Ripple Labs, confirming that programmatic sales of XRP on public exchanges do not constitute securities transactions (SEC Litigation Release No. 26369, August 2025).

This guide covers what XRP is, who created it, how its underlying technology works, what it is used for, and how it differs from Ripple Labs — the private company most often confused with the cryptocurrency itself. If you are ready to purchase XRP, see our step-by-step guide to buying your first XRP.

What Is XRP?

XRP is a digital asset native to the XRP Ledger, created by Ripple Labs in 2012 and designed for fast cross-border payments. Transactions settle in 3–5 seconds at a cost below $0.01, making XRP one of the fastest major cryptocurrencies.

XRP functions as the native currency of the XRP Ledger (XRPL), an open-source, permissionless Layer 1 blockchain that has operated continuously since June 2012. The XRPL is not a fork of Bitcoin or Ethereum — it was built from scratch with an entirely different architecture optimized for payments rather than general-purpose computation. Every transaction on the XRPL requires a small amount of XRP to pay network fees, which are destroyed upon processing — a deflationary mechanism that has burned over 14 million XRP since launch (XRPL.org Transaction Cost Documentation, 2026). This fee-burning structure serves a dual purpose: it prevents spam transactions from overwhelming the network and gradually reduces total supply over time, creating a net-deflationary dynamic unique among major cryptocurrencies.

The XRP Ledger launched on June 2, 2012, with all 100 billion XRP tokens created at genesis. No additional XRP can ever be minted — there is no mining process, no staking reward emissions, and no inflationary supply schedule. This pre-mined, fixed-supply model fundamentally distinguishes XRP from proof-of-work cryptocurrencies like Bitcoin (where miners earn newly issued BTC through block rewards) and proof-of-stake networks like Ethereum (where validators earn ETH through staking emissions) (XRP Ledger Whitepaper, Schwartz et al., 2014). Of the 100 billion total supply, approximately 61 billion tokens circulate publicly as of February 2026. Ripple Labs holds the remainder — approximately 39 billion XRP — in cryptographically secured escrow accounts that release a maximum of 1 billion XRP per month. Any unused tokens from each monthly release are returned to escrow and re-locked for an additional 55-month period (Ripple Q4 2025 Markets Report).

XRP also requires each wallet address to maintain a minimum reserve of 1 XRP (reduced from 10 XRP following a protocol amendment in 2024) to prevent ledger bloat. This reserve is not spent — it simply must remain in the wallet as long as the address is active on the XRPL (XRPL.org Reserve Documentation, 2026).

For a deeper understanding of how XRP’s fixed supply and monthly escrow releases affect its economics, see XRP’s supply mechanics and deflationary design.

Is XRP a Stablecoin?

No. XRP is not a stablecoin. Stablecoins like USDT (Tether) and USDC are pegged to fiat currencies — typically the US dollar — and maintain a target price of $1.00 through reserve backing. XRP’s price fluctuates based on market supply and demand, just like Bitcoin and Ethereum. XRP reached an all-time high of $3.65 on July 18, 2025, and has traded as low as $0.003 during its early history (CoinGecko Historical Data, 2026). Ripple Labs does issue a stablecoin called RLUSD, launched in December 2024, but RLUSD and XRP are separate assets with different functions.

Is XRP an Altcoin?

Yes. In cryptocurrency terminology, any digital asset other than Bitcoin is classified as an “altcoin” (alternative coin). XRP is an altcoin by this standard definition. However, XRP’s market capitalization, institutional adoption, and regulatory clarity place it in a distinct category from smaller, less-established altcoins. XRP has consistently ranked among the top five cryptocurrencies by market capitalization since 2017 (CoinMarketCap Historical Rankings).

Understanding the origins of XRP requires examining the team and company behind its creation, which is the focus of the next section.

Who Created XRP?

David Schwartz, Jed McCaleb, and Arthur Britto created XRP and the XRP Ledger in 2012 before founding Ripple Labs (originally OpenCoin). Ripple Labs builds commercial products on XRP but does not own or control the decentralized XRP Ledger.

The development of what became the XRP Ledger began in 2011 when David Schwartz, Jed McCaleb, and Arthur Britto set out to build a faster, more energy-efficient alternative to Bitcoin’s proof-of-work consensus model. Each founder brought complementary expertise to the project. Schwartz, a cryptographer with a background in distributed computing at WebMaster Incorporated, designed the novel consensus algorithm that would become the XRPL’s defining innovation. He holds a patent for a distributed computing system and currently serves as Ripple’s Chief Technology Officer. McCaleb, who had previously founded the Mt. Gox Bitcoin exchange (later sold to Mark Karpelès) and the eDonkey peer-to-peer file-sharing network, contributed the network architecture vision and early community-building efforts. Britto, a software developer with expertise in financial systems, focused on the ledger’s core engineering and protocol design (Ripple Labs Company History, 2025; Schwartz, “The Inherent Limitations of PoW,” 2014).

The three founders launched the XRP Ledger on June 2, 2012, creating all 100 billion XRP tokens at genesis. They then co-founded a company originally named NewCoin in September 2012, briefly renamed it OpenCoin in early 2013, and finally established the company as Ripple Labs in September 2013. Chris Larsen, a serial entrepreneur who had co-founded E-Loan (an early online mortgage lender) and Prosper Marketplace (a peer-to-peer lending platform), joined as co-founder and first CEO of the company. Larsen’s fintech experience shaped Ripple’s commercial strategy toward institutional financial services rather than consumer payments (SEC v. Ripple Labs, Case No. 1:20-cv-10832, Complaint Filing, December 2020).

The founders allocated the 100 billion XRP tokens as follows: 80 billion XRP were gifted to Ripple Labs to fund development and support the XRP ecosystem, while 20 billion XRP were distributed among the three founders — with Larsen receiving 9.5 billion, McCaleb receiving 9 billion, and Britto’s allocation remaining undisclosed. Ripple placed 55 billion of its allocation into cryptographic escrow in December 2017 to provide supply transparency and predictability, addressing community concerns about the company’s large holdings (Ripple Insights, “Ripple Escrows 55 Billion XRP,” December 2017). McCaleb departed Ripple in 2014 to co-found Stellar, a competing payment-focused blockchain, and gradually sold his XRP allocation through a structured settlement agreement completed in July 2022 (CoinDesk, “Jed McCaleb Has Finally Sold All His XRP,” July 2022).

The critical distinction is that Ripple Labs builds enterprise products that use XRP, but the company does not own the XRP Ledger. The XRPL operates as an independent, open-source network maintained by a global network of over 150 validators, of which Ripple runs only 6 (XRPL.org Validator Registry, February 2026). Brad Garlinghouse has served as Ripple’s CEO since December 2016, steering the company through its SEC legal battle and expansion into institutional products.

With the founding team and company relationship established, the next natural question is what the name “XRP” actually means.

What Does XRP Stand For?

XRP does not stand for an acronym. The name follows currency convention where “X” denotes non-national currencies (like XAU for gold), and “RP” references Ripple. The XRP Ledger uses XRP as its native utility token for transaction fees and liquidity.

Despite widespread speculation, XRP is not an acronym and does not stand for “Ripple Protocol” or any other expanded form. David Schwartz confirmed this directly in a 2018 post on the XRP community forum, stating that the founders chose the three-letter ticker without assigning each letter a specific meaning (Schwartz, XRPChat Forum Post, 2018).

The naming convention does follow an established pattern in international finance. The International Organization for Standardization (ISO 4217) assigns three-letter codes to currencies worldwide. Codes beginning with “X” are reserved for non-national currencies and supranational assets: XAU represents gold, XAG represents silver, XPT represents platinum, XBT is the ISO-proposed code for Bitcoin, and XDR represents the International Monetary Fund’s Special Drawing Rights (ISO 4217 Standard, International Organization for Standardization). The “X” prefix in XRP signals that it is a supranational digital asset not issued by any government, while “RP” is commonly understood as a reference to Ripple, the original project name. This convention places XRP alongside precious metals and international reserve assets in terms of naming structure — a deliberate positioning choice by the founders.

The XRP Ledger was initially called the “Ripple Protocol Consensus Algorithm” (RPCA) in its founding whitepaper, which may have contributed to the common assumption that XRP stands for “Ripple Protocol” (Schwartz, Youngs, and Britto, “The Ripple Protocol Consensus Algorithm,” 2014). Some community members have retroactively proposed backronyms such as “XRP Rapid Payments” or “X Ripple Protocol,” but none of these were intended by the creators. Regardless of the name’s precise derivation, XRP has become the universally recognized identifier for both the token and its trading pair across all major exchanges — including XRP/USD, XRP/EUR, XRP/BTC, XRP/USDT, XRP/GBP, and XRP/JPY.

Knowing what XRP is and where its name comes from naturally leads to the question of how the underlying technology actually processes transactions.

How Does XRP Work?

XRP operates on the XRP Ledger using Federated Byzantine Agreement consensus, where trusted validator nodes agree on transaction validity every 3–5 seconds without mining. This eliminates energy-intensive proof-of-work, enabling ~1,500 transactions per second at minimal cost.

The XRP Ledger’s consensus mechanism differs fundamentally from both Bitcoin’s proof-of-work (PoW) and Ethereum’s proof-of-stake (PoS). Rather than miners competing to solve mathematical puzzles or stakers locking tokens as collateral, the XRPL relies on a network of trusted validator nodes that reach agreement through a process called Federated Byzantine Agreement (FBA). Each validator maintains a Unique Node List (UNL) — a set of validators it trusts to behave honestly. When at least 80% of validators on a node’s UNL agree that a set of transactions is valid, those transactions are confirmed and written to the ledger (Schwartz, Youngs, and Britto, “The Ripple Protocol Consensus Algorithm,” 2014).

This consensus round occurs every 3–5 seconds, producing a new “ledger version” — the XRPL equivalent of a block. Each ledger version contains the complete state of all accounts, balances, and open orders on the network, not just the transactions processed since the previous version. This full-state model means any node can validate the current state of the network from a single ledger version without replaying the entire transaction history — a significant efficiency advantage for nodes joining the network (XRPL.org Technical Documentation, 2026). The process has been running continuously since June 2012, closing over 90 million ledger versions without a single rollback or network halt (XRPL.org Ledger History, February 2026).

The energy efficiency of this design is dramatic. A 2021 study commissioned by the XRP Ledger Foundation and conducted by the Carbon Trust and University College London estimated the XRPL’s annual energy consumption at approximately 790,000 kWh — roughly equivalent to the annual electricity use of 75 US households. For comparison, Bitcoin’s annual energy consumption exceeds 150 TWh, making the XRPL approximately 0.0000112% of Bitcoin’s energy footprint (Carbon Trust/UCL, “Assessing the Energy Consumption of the XRP Ledger,” 2021).

A standard XRP transaction follows this sequence: a sender initiates a payment by signing a transaction with their private key. The transaction propagates across the validator network within milliseconds. Validators include the transaction in their proposed transaction set for the current consensus round. The 80%+ agreement threshold is reached across overlapping UNLs. The validated transaction is written to the new ledger version and becomes irreversible. The entire process — from initiation to final settlement — completes in 3–5 seconds with no possibility of reversal or double-spending once confirmed.

The XRP Ledger also includes several built-in features that distinguish it from other Layer 1 blockchains. The native decentralized exchange (DEX) has operated since 2012, allowing any XRPL-issued token to be traded directly on-ledger through an order book model. Support for non-fungible tokens (NFTs) was added through the XLS-20 amendment activated in October 2022. Trust Lines enable users to hold and transfer any tokenized asset — including fiat-backed stablecoins and central bank digital currencies — directly on the XRPL. Most recently, Hooks — smart contract-like functionality enabling programmable transaction logic — were added via the XLS-85 amendment activated in February 2026 (XRPL Amendments Documentation, 2026).

For a technical deep dive into the XRPL’s architecture, validator network, and protocol features, see how the XRP Ledger’s architecture works.

Is XRP Decentralized?

The decentralization of XRP is a subject of ongoing debate within the cryptocurrency community, and the answer depends on how decentralization is defined and measured. The XRP Ledger operates with over 150 active validators distributed globally across data centers in North America, Europe, Asia, and Australia. No single entity — including Ripple Labs — can unilaterally alter the network’s rules, reverse transactions, or censor specific addresses. Ripple runs approximately 6 of the 36 validators on the default Unique Node List (UNL), representing roughly 17% of the trusted validator set (XRPL.org Validator Registry, February 2026). Protocol amendments — changes to the XRPL’s core functionality — require 80% consensus sustained over a continuous two-week period before activation, meaning Ripple alone cannot approve or block changes to the network.

Critics raise several centralization concerns: Ripple’s large XRP holdings (approximately 39 billion tokens in escrow) give the company significant economic influence over the asset; Ripple historically curated the default UNL, which validators often adopt without modification; and the relatively small number of UNL validators (36) compares unfavorably to Bitcoin’s thousands of mining nodes or Ethereum’s hundreds of thousands of validators. Proponents counter that the escrow funds are cryptographically locked with predetermined release schedules, the default UNL has diversified significantly since 2017 to include universities (such as the University of Tokyo), exchanges (such as Bitstamp), and independent operators, and that UNL validators represent trusted consensus participants rather than resource-competing miners — a fundamentally different security model where node count is not directly comparable.

With the technology explained, the next section examines the practical applications driving XRP adoption across financial institutions and payment corridors.

What Is XRP Used For?

XRP serves three primary functions: cross-border payment settlement through Ripple’s On-Demand Liquidity service, a bridge currency between fiat currencies, and a native token powering the XRP Ledger’s built-in decentralized exchange and emerging DeFi features.

The primary use case for XRP is cross-border payment settlement. Traditional international wire transfers through the SWIFT network require pre-funded nostro/vostro accounts — pools of money that banks maintain in foreign countries to facilitate transactions. These accounts tie up an estimated $27 trillion in global liquidity, representing capital that financial institutions cannot deploy productively (McKinsey Global Payments Report, 2024). The Society for Worldwide Interbank Financial Telecommunication (SWIFT) processes an average of 44.8 million messages per day across 11,000 member institutions, but settlement times range from 1–5 business days and transaction costs average $20–$50 per transfer (SWIFT Annual Review, 2025).

Ripple’s On-Demand Liquidity (ODL) service uses XRP as a bridge asset to eliminate the need for pre-funded accounts entirely. The mechanism works through a three-step process: a sending institution converts local fiat currency to XRP through a liquidity provider, the XRP transfers across the XRPL in 3–5 seconds, and a receiving liquidity provider converts the XRP to the destination fiat currency. The entire process — including both fiat-to-crypto conversions — typically completes in under 10 seconds at a fraction of traditional costs (Ripple ODL Product Documentation, 2026). This approach is particularly valuable for payment corridors where establishing and maintaining nostro accounts is prohibitively expensive, such as remittance routes between developing nations.

Ripple’s payment network, RippleNet, connects over 300 financial institutions across 55+ countries as of 2026. Customers include SBI Remit (Japan), Tranglo (Southeast Asia), and Novatti (Australia) (Ripple Annual Report, 2025). The ODL service processed over $70 billion in transaction volume during 2024, representing roughly a 300% increase over 2023 volumes (Ripple Q4 2024 Markets Report).

Beyond institutional payments, XRP powers several other applications on the XRP Ledger. The XRPL’s built-in decentralized exchange enables direct token-to-token trading without intermediaries. Any token issued on the XRPL — including fiat-backed stablecoins, central bank digital currencies (CBDCs), and NFTs — can be exchanged using the native order book. Unlike DEXs on Ethereum that rely on automated market makers (AMMs) and often suffer from impermanent loss, the XRPL DEX uses a traditional limit order book model that allows traders to set precise prices for their orders. The XRPL DEX has processed transactions continuously since 2012, making it one of the oldest operational decentralized exchanges in the blockchain ecosystem — predating Uniswap by seven years.

Ripple’s RLUSD stablecoin, launched in December 2024 and reaching over $1 billion in market capitalization by November 2025, operates natively on the XRPL alongside Ethereum (Ripple RLUSD Launch Announcement, December 2024). RLUSD is backed 1:1 by US dollar deposits and short-term US Treasury bills, with monthly attestation reports published by an independent accounting firm.

For a comprehensive examination of every XRP application — from payments to NFTs to emerging central bank digital currency pilots — see all of XRP’s real-world use cases in detail.

What Banks Use XRP?

Financial institutions using Ripple’s payment technology span multiple continents and use case categories. In Asia, SBI Holdings and SBI Remit in Japan have been among the earliest and most active ODL adopters, processing remittance payments between Japan and the Philippines, Thailand, and Vietnam. Tranglo, a payment hub serving Southeast Asia, uses ODL for remittance corridors across the Philippines, Thailand, Indonesia, and Malaysia — regions where traditional remittance fees average 6–8% of transfer value (World Bank Remittance Prices Worldwide, 2025). In Europe, Santander integrated Ripple technology into its One Pay FX service for real-time international transfers across Spain, the UK, Brazil, and Poland. National Australia Bank, Standard Chartered, and Novatti Group have also partnered with Ripple for cross-border payment applications (Ripple Partner Announcements, 2024–2025).

It is important to note a critical distinction: many of Ripple’s banking partners use RippleNet’s messaging and settlement technology without necessarily utilizing XRP directly as a bridge asset. RippleNet connects over 300 financial institutions across 55+ countries, but only a subset of those institutions use ODL with XRP for liquidity. The distinction between RippleNet adoption (messaging infrastructure) and XRP/ODL adoption (actual XRP utilization) is essential for accuracy when evaluating XRP’s institutional traction.

The frequent confusion between XRP the cryptocurrency and Ripple the company warrants a direct comparison, which the final section addresses.

Is XRP the Same as Ripple?

XRP and Ripple are not the same. XRP is a cryptocurrency and the native asset of the XRP Ledger. Ripple Labs is a private fintech company that uses XRP in its products but does not control the open-source XRP Ledger network.

This is the single most common misconception in the XRP ecosystem. Media outlets, social media discussions, and even some exchange listings have used “Ripple” and “XRP” interchangeably, leading to persistent confusion among investors and the general public. The distinction is both legally and technically significant, particularly after the SEC lawsuit established that the two are separate entities under U.S. law (SEC v. Ripple Labs, Case No. 1:20-cv-10832, Summary Judgment, July 2023).

The confusion stems partly from history. The original whitepaper was titled “The Ripple Protocol Consensus Algorithm,” the founders originally called their project “Ripple,” and early marketing used the Ripple brand extensively when referring to both the company and the technology. As the project matured, the community and company worked to separate the identities: the company became “Ripple Labs” (or simply “Ripple”), the blockchain became the “XRP Ledger,” and the token retained the name “XRP.” Despite these efforts, the conflation persists — Google searches for “Ripple price” still vastly outnumber searches for “XRP price” (Google Trends Data, February 2026).

Ripple Labs holds a significant amount of XRP — approximately 39 billion tokens locked in escrow as of February 2026 — which creates a financial relationship between the company and the token. However, ownership of XRP tokens does not equate to ownership of the XRP Ledger any more than holding a large amount of Bitcoin constitutes ownership of the Bitcoin network. The XRPL’s open-source code, publicly accessible validator network, and community-driven amendment process operate independently of Ripple’s corporate decisions (XRPL.org Governance Documentation, 2026; Ripple Q4 2025 Markets Report).

For a complete analysis of every dimension of this distinction — including legal, technical, and financial differences — see complete breakdown of how Ripple and XRP differ.

With XRP’s identity, technology, use cases, and relationship to Ripple fully defined, the following questions address the most common remaining inquiries new users have about this cryptocurrency.

Frequently Asked Questions About XRP