What Is Ripple? The Company Behind XRP
5 min read · Updated 2025-01-20
Ripple is not XRP
This confuses a lot of people. Let's be clear:
- Ripple (Ripple Labs Inc.) is a private technology company based in San Francisco
- XRP is an independent cryptocurrency that runs on the XRP Ledger
- XRP Ledger is a decentralized blockchain that would continue to operate even if Ripple disappeared
Ripple uses XRP in its products, holds a large amount of XRP, and is the biggest contributor to XRP Ledger development. But they don't control XRP or the XRPL.
What Ripple actually does
Ripple builds payment infrastructure for financial institutions. Their main products:
RippleNet
A global payment network connecting banks and payment providers. Think of it as SWIFT but faster. Banks on RippleNet can send payments to each other instantly.
On-Demand Liquidity (ODL)
This is the product that actually uses XRP. Instead of pre-funding accounts in different countries, financial institutions convert their currency to XRP, send it in seconds, and convert it to the destination currency.
ODL is growing fast — it processed over $15 billion in cross-border volume in 2024.
Ripple Custody
Institutional-grade crypto custody for banks and fintech companies that want to offer crypto services to their customers.
Ripple CBDC Platform
Helping central banks explore and issue Central Bank Digital Currencies (CBDCs).
How Ripple makes money
- Software licensing: Banks pay to use RippleNet
- Transaction fees: ODL transactions generate revenue
- XRP sales: Ripple sells XRP from escrow (up to 1 billion/month, usually much less)
- Custody services: Fees from institutional custody
The XRP escrow
When XRP was created, 100 billion tokens were minted. Ripple was given 80 billion. To address concerns about dumping, Ripple locked 55 billion XRP in a cryptographic escrow in December 2017.
Each month, 1 billion XRP unlocks. Whatever Ripple doesn't sell goes back into escrow. In practice, Ripple sells far less than 1 billion per month.
The SEC lawsuit impact
The SEC's lawsuit against Ripple (2020-2025) was really about one question: is XRP a security?
The court's answer: XRP sold on public exchanges is not a security. Institutional sales (directly from Ripple to large buyers) were treated differently.
This ruling gave XRP more legal clarity than almost any other cryptocurrency in the US.
Why Ripple matters
Even if you're skeptical about XRP's price, Ripple is doing something remarkable: getting real banks and financial institutions to use blockchain technology for actual payments. Not speculation, not DeFi experiments — real cross-border payments processing billions of dollars.
Whether that makes XRP a good investment depends on whether you think ODL adoption will grow enough to significantly increase demand for XRP.