Ripple & XRP: the evolution of a historic ledger

Computer engineers David Schwartz, Jed McCaleb and Arthur Britto founded the XRP Ledger in 2012. The project went by different names- first Newcoin, then Opencoin and Ripple Labs- before settling on Ripple in 2015. 

The XRP Ledger Foundation launched in September 2020 to support the growth and adoption of the protocol with $6.5 million raised from three of its native projects. The foundation used the funds to establish the XRP Community Fund (to boost adoption) and upgrade the protocol’s infrastructure.

Ripple has faced several legal challenges over the years. It was first sued by investor Ryan Coffey in May 2018 for allegedly breaching US security regulations by selling its XRP native token to the public (Coffey had lost 32% on a trade earlier in the year). A California judge dismissed the case in August 2018. The US Securities and Exchange Commission (SEC) then sued Ripple in December 2020, seeking to formally classify XRP as a security. After a three-year legal battle, a New York court ruled against the SEC but found that institutional sales of the tokens broke the law and fined Ripple $125 million in August 2024. The SEC withdrew its appeal against the penalty in March 2025.

Payment network

Since launching in 1973, the SWIFT network has dominated cross-border payments. However, it’s inefficient- payments must go through several layers before reaching the recipient, increasing costs and slowing transactions.

Ripple designed a decentralised payment network to compete with SWIFT. Its core product is a platform allowing banks to transfer money across borders that charges low fees and meets compliance requirements such as ‘Know your customer’. The platform leverages the Interledger Protocol, developed by Ripple but system agnostic, which enables interoperability between financial institutions, Web3 firms and more.

Ripple also offers ‘on-demand liquidity’ that removes the need for banks to hold pre-funded accounts with partner institutions in different countries. Some cross-border transactions, for instance between two lightly traded currencies, involve what’s known as a bridge, an intermediary currency to facilitate the conversion. The bridge is typically the US dollar, but users in the Ripple ecosystem can choose to use XRP instead. XRP leverages its properties as a cryptocurrency to improve efficiency, processing transactions in three to five seconds and charging fees as low as $0.0002.

Ripple has developed a global reach. According to the media Coindesk, members of the network include Spain’s Santander, the Canadian Imperial Bank of Commerce, the National Bank of Abu Dhabi and investment bank UBS.  

XRP Ledger ecosystem

After the native token, XRP Ledger’s biggest projects by market capitalisation are:

• RLUSD, a stablecoin pegged to the US dollar. Launched in December 2024, RLUSD is a fiat-backed stablecoin, meaning it’s backed at a one-to-one ratio by dollars and cash equivalents. While RLUSD serves the same purposes as stablecoins in general, for instance as collateral in lending protocols, it also complements XRP’s role in Ripple’s payment network, acting as an intermediary for dollar-denominated transactions.

• Sologenic, a decentralised exchange and tokenisation platform. 

Expansion

In early April 2025, Ripple acquired Hidden Road, a prime broker with more than 300 clients, which settles over $3 trillion of trades each year across foreign exchange, fixed income, derivatives and digital assets. Ripple, a Hidden Road client, paid $1.25 billion in one of the crypto sector’s biggest deals. Following the acquisition, Hidden Road will shift its post-trade activity onto the XRP Ledger and use RLUSD as collateral for its products, making RLUSD the first stablecoin to serve as collateral for both traditional and crypto trades. Ripple also hopes to offer its bank-grade custody services to Hidden Road clients.

Given the importance of institutional adoption, this acquisition represents an interesting milestone for Ripple. Institutional investors need to have confidence in the infrastructure underpinning trades, and Hidden Road brings the necessary credibility and track record, counting leading derivatives marketplace CME Group among its clients and having secured a MiCAR license in the Netherlands and Digital Asset Firm Registration from the UK’s FCA.