Key Takeaways
- XRP is the native cryptocurrency of the XRP Ledger, a blockchain designed for fast, low-cost payments.
- Ripple is a company that uses XRP and the XRP Ledger in its payment products; it's not the same thing as XRP.
- All 100 billion XRP were created at launch, and Ripple holds a large share, much of it in escrow.
- A long-running US SEC lawsuit against Ripple shaped XRP's history and concluded in 2025.
XRP is one of the oldest and largest cryptocurrencies by market value, known for fast settlement and its close association with the payments company Ripple. It's also one of the most debated. This guide explains what XRP is, how it works and what to consider before buying.
What is XRP?
XRP is the native token of the XRP Ledger (XRPL), an open-source blockchain launched in 2012 by developers including Jed McCaleb, Arthur Britto and David Schwartz. The ledger was designed for payments: transactions settle in a few seconds and typically cost a tiny fraction of a cent. XRP is used to pay network fees and can act as a "bridge currency" when converting between other currencies.
XRP vs Ripple: what's the difference?
XRP is the cryptocurrency. The XRP Ledger is the blockchain it runs on. Ripple is a private company that builds payment and custody products for financial institutions, some of which use XRP and the XRPL. Ripple received a large portion of the original XRP supply and remains one of its biggest holders, but the ledger itself is run by independent validators and open-source developers. Ripple also issues a dollar stablecoin called RLUSD.
How does the XRP Ledger work?
- Consensus without mining: the XRPL doesn't use proof of work or proof of stake. Instead, validators agree on transaction order through a consensus protocol, with each node choosing a list of validators it trusts.
- Fast and cheap: ledgers close every few seconds, and a small amount of XRP is destroyed with each transaction as a fee, which helps prevent spam.
- Built-in features: the ledger includes a native decentralized exchange, token issuance and escrow functions.
- Account reserve: each XRPL account must keep a small minimum balance of XRP.
For background on blockchains in general, read what is blockchain.
XRP supply
All 100 billion XRP were created when the ledger launched; there's no mining or staking issuance. Ripple placed a large portion of its holdings into on-ledger escrow accounts that release XRP on a schedule, and it often re-locks unused amounts. The total supply slowly decreases because transaction fees are burned. Understanding supply and unlocks matters when using market cap to evaluate any coin.
The SEC case
In December 2020, the US Securities and Exchange Commission sued Ripple, alleging that its XRP sales were unregistered securities offerings. In July 2023, a federal judge ruled that Ripple's sales to institutional investors violated securities law but that XRP sales to the public on exchanges did not. The case concluded in 2025 after the SEC ended its appeal. The outcome removed a major cloud over XRP in the US, and many exchanges relisted it.
What is XRP used for?
- Cross-border payments and liquidity for payment providers
- Trading and investment
- Paying fees and reserves on the XRP Ledger
- Issuing and trading tokens, including stablecoins, on the XRPL
Risks to consider
- Concentration: Ripple and its founders hold or have held large amounts of XRP, and sales can affect the market.
- Adoption uncertainty: it's debated how much institutional payment volume actually requires XRP.
- Volatility: like most altcoins, XRP's price can swing sharply.
- Scams: fake XRP giveaways impersonating Ripple executives are common. Learn the red flags.
How to buy and store XRP
XRP is available on most major crypto exchanges. When withdrawing to a wallet, note that many exchanges require a destination tag for XRP deposits; omitting it can delay or lose your funds. Hardware wallets such as Ledger support XRP. Remember the small reserve balance required to activate an XRPL account.
Frequently asked questions
Is XRP a good investment?
XRP has a large community and a long track record, but its value depends on adoption, market sentiment and supply dynamics. Treat it as a high-risk asset.
Can you mine or stake XRP?
No. All XRP already exists, and the XRP Ledger doesn't use mining or native staking.
Is XRP a security?
A US court ruled in 2023 that XRP sold to the public on exchanges wasn't offered as a security, and the SEC case concluded in 2025. Regulatory treatment can differ in other countries.
What is an XRP destination tag?
A number that identifies your account when sending XRP to an exchange that uses a shared address. Always include it if the exchange provides one.
This guide is for educational purposes only and is not financial advice.
This content is for educational purposes only and is not financial advice. Cryptocurrency investments are volatile and risky. Some links may be affiliate links — see our disclosure.