XRP is the native cryptocurrency of the XRP Ledger, a blockchain built in 2012 for fast, cheap cross-border payments. Transactions settle in three to five seconds for a fraction of a cent. For nearly five years XRP sat at the center of crypto's most consequential securities case. The SEC sued Ripple in December 2020, and the case closed in 2025 without XRP being ruled a security on public exchanges.
XRP and Ripple are not the same thing
Because this confusion causes most of the misunderstandings, take it first.
The XRP Ledger is an open blockchain that anyone can use. Launched in 2012, it runs whether or not any company supports it.
XRP is the asset native to that ledger, used to pay transaction fees and to move value between currencies.
Ripple is a private company that builds payment software for banks and financial institutions, holds a large quantity of XRP, and contributes to the ledger's development. Unlike a startup minting a token, it did not create XRP outright, though its founders were involved in the ledger's creation and the company received a large allocation.
So "Ripple" is a business and "XRP" is an asset. Interchangeably used as the names are, the distinction mattered enormously in court.
How the XRP Ledger works
Not mining. Not staking either.
Bitcoin uses Proof of Work, where miners burn electricity. Ethereum uses Proof of Stake, where validators lock up collateral. Neither applies to the XRP Ledger. Instead a consensus protocol has independent validators agree on transaction order every few seconds, with each server choosing a list of other validators it trusts.
In practice: settlement in three to five seconds, fees measured in fractions of a cent, and energy consumption far below either alternative. The trade-off places trust in a validator list rather than in economic cost, which critics argue is a weaker guarantee and supporters argue is sufficient for a payments network.
With every transaction a small amount of XRP is destroyed, which makes the supply slowly deflationary.
The SEC case against Ripple and what it settled
In December 2020 the SEC sued Ripple, alleging it had raised over $1.3 billion through unregistered securities sales of XRP. Running nearly five years, the case produced a split outcome rather than a clean win for either side.
| Stage | Outcome |
|---|---|
| December 2020 | SEC files suit. Many US exchanges delist XRP |
| July 2023 | Judge Torres rules XRP sold on public exchanges is not a security. Direct institutional sales were securities transactions |
| August 2024 | Final judgment sets a $125 million civil penalty, far below the SEC's original demand |
| 2025 | Both sides withdraw appeals and the case closes, making the 2023 framework final |
| March 2026 | Joint SEC and CFTC interpretation names XRP among 16 digital commodities |
What is settled: XRP bought and sold on exchanges is not a security. Exchanges can list it, ETFs can hold it, and the SEC cannot bring the same claims again. What was not a win: Ripple's direct institutional sales were found to be securities transactions, and the penalty stands.
From the ruling came a framework other cases have leaned on since. An asset's status can depend on how and to whom it was sold, rather than on the asset alone.
What changed for XRP after the SEC case closed
US exchanges relisted XRP. Liquidity returned. Approved shortly after, spot XRP ETFs drew roughly $1.4 billion in their first quarter of trading in 2026. Institutions that had avoided the asset purely on legal risk no longer had that reason.
Naming XRP a digital commodity, the March 2026 joint interpretation removed the remaining administrative ambiguity. That document is guidance rather than statute, and a future commission could revise it.
What XRP is actually used for
- Cross-border settlement. Moving value between currencies without pre-funding accounts in each destination country, which is the problem Ripple's software addresses for banks.
- Bridge currency. Converting one currency to XRP and then to another, rather than holding balances in both.
- Paying ledger fees, since every XRP Ledger transaction costs a small amount of XRP.
- Trading and ETF exposure, which is where most volume sits.
Worth being direct about a common overstatement. Most banks using Ripple's payment software do not necessarily use XRP itself. Sold as software that can operate with or without the asset, the product gets conflated with the token in marketing on both sides of the argument.
XRP risks to understand
- Supply concentration. Ripple holds a large quantity of XRP, much of it in escrow released on a schedule. That is a known, published overhang, and it is still an overhang.
- The institutional sales finding stands. Ripple remains constrained in how it structures direct US institutional sales.
- Regulatory status rests partly on guidance. The court ruling is final, and the digital commodity classification is an interpretation that can change.
- Validator model. Consensus relies on trusted validator lists rather than economic cost, which is a design choice with real critics.
- Volatility. XRP has moved sharply on legal news throughout its history and remains a volatile asset.
Trade XRP on mb.io
Resolved now is the legal question that kept XRP off many venues. Getting regulated access to the asset is a separate matter.
mb.io is a regulated crypto spot exchange backed by MultiBank Group, a financial institution founded in 2005 that serves more than 2 million clients across 100+ countries.
- Regulated by VARA in the UAE and AUSTRAC in Australia
- 10/10 security score from Hacken, an independent blockchain security auditor
- Institutional-grade MPC custody powered by Fireblocks, with segregated client funds
- A curated list of assets, so you're not sorting through thousands of tokens to find the ones worth trading
- Buy, sell, and swap in three steps, from sign-up to purchase
- 24/7 multilingual client support
Open your account and start trading on mb.io.
Frequently asked questions
What is XRP used for?
Fast, low-cost cross-border payments. Settling in three to five seconds for a fraction of a cent, it can act as a bridge currency between two national currencies without pre-funding accounts in each country.
Is XRP a security?
Not when bought or sold on public exchanges. Established by a July 2023 ruling, that position was reinforced when the March 2026 joint SEC and CFTC interpretation named XRP among 16 digital commodities. Ripple's direct institutional sales were found to be securities transactions.
What is the difference between XRP and Ripple?
Native to the XRP Ledger, an open blockchain launched in 2012, XRP is the asset. Ripple is a private company that builds payment software, holds a large amount of XRP, and contributes to the ledger's development.
Did Ripple win the SEC lawsuit?
Partly. On public markets, the court found XRP itself is not a security, which was the outcome that mattered most for holders. Ripple lost on direct institutional sales and paid a $125 million civil penalty.
How does XRP achieve consensus without mining?
Independent validators agree on transaction order every few seconds, with each server choosing which validators it trusts. Without mining or staking, settlement is fast and energy use is low.
Is there an XRP ETF?
Yes. Approved following the case's resolution, spot XRP ETFs drew roughly $1.4 billion in their first quarter of trading in 2026.
How much XRP does Ripple hold?
A large quantity, much of it locked in escrow and released on a published schedule. Among the more common criticisms of the asset is the size of that holding.
Do banks using Ripple actually use XRP?
Not always. Sold as software that works with or without the asset, Ripple's product gets frequently conflated with the token. Some corridors use XRP as a bridge currency and others do not.
