What is XRP used for? Cross-border payments explained

The cryptocurrency built for a different purpose

Bitcoin is digital gold. Ethereum powers smart contracts. Solana focuses on speed and scalability.

XRP was built for moving money across borders, instantly, and cheaply.

While Bitcoin and Ethereum dominate headlines, XRP has quietly become embedded in the infrastructure of global finance.

Over 300 financial institutions use RippleNet infrastructure, and banks across Asia, Europe, and North America are using XRP to settle cross-border payments in seconds instead of days.

If you've ever wondered what XRP is actually used for beyond trading, this guide explains how it works, why banks are adopting it, and what makes it different from other cryptocurrencies.

What is XRP?

XRP is a digital asset that operates on the XRP Ledger (XRPL), a blockchain designed specifically for payments.

Ripple Labs, a San Francisco-based fintech company founded in 2012, built RippleNet to facilitate cross-border payments, with XRP serving as a bridge asset to enable real-time currency conversion and settlement 

Unlike Bitcoin, which anyone can mine, XRP is premined and relies on a select group of validators using a consensus protocol rather than energy-intensive mining.

Key characteristics:

• Settles transactions in 3-5 seconds compared to Bitcoin's 10 minutes and Ethereum's 13 seconds
• Transaction fees average $0.0002 (fractions of a cent) compared to SWIFT's $25-$50 per transfer
• Handles up to 1,500 transactions per second with tested capacity exceeding 65,000 TPS 
• Consumes about 0.0005 kWh per transaction, over 99.99% less energy than Bitcoin's ~700 kWh

The problem XRP solves: Cross-border payments

Sending money internationally is still painfully slow and expensive.

The SWIFT network handles over $5 trillion in daily payments through 11,500+ banks worldwide, but it doesn't actually move money directly. Instead, it sends payment instructions between banks.

Here's the problem: to send money internationally, banks need to hold funds in foreign currencies ahead of time — often in accounts at partner banks in different countries. This ties up an estimated $27 trillion in parked capital that could be used elsewhere.

When you send money from the US to Thailand, for example, your bank doesn't send dollars directly. It uses its pre-funded account at a partner bank, which then converts and transfers to the recipient's bank. Each step adds time and cost.

The result: Traditional cross-border payments typically take 2-5 days with fees ranging from $10-$50 per transaction plus forex spreads.

How XRP changes this:

Instead of routing through multiple correspondent banks, a US business paying a Thai supplier can use RippleNet to convert dollars into XRP, send it across the globe in seconds, and convert it into Thai baht on the other end — all within a single transaction.

Ripple Payments enables near real-time settlement, reducing a process that takes a minimum of 3-5 days using traditional finance down to mere seconds.

How XRP works as a bridge currency

XRP's role in cross-border payments is often misunderstood. It doesn't replace existing banking systems — it enhances them.

XRP acts as a bridge currency on RippleNet, providing liquidity and enabling near-instant settlement across multiple currencies and ledgers.

Here's a practical example:

Without XRP (Traditional Method): A bank in Japan needs to send money to the Philippines. It must keep millions of Philippine pesos sitting in reserve accounts — just waiting for when customers need to send money. This ties up capital that could be earning returns or funding loans.

When a transfer happens, the money moves slowly through multiple banks, each taking a cut and adding delay.

With XRP (Ripple's On-Demand Liquidity): The bank converts Japanese yen into XRP, sends it over the XRP Ledger in seconds, and converts XRP into Philippine pesos on the other side. The entire process happens in one transaction.

XRP usage cuts the amount of pre-funded foreign currency that banks need to hold by over 60%, unlocking capital that was previously tied up and doing nothing.

This means banks can use that money for loans, investments, or other profitable activities instead of keeping it parked in foreign accounts.

Which banks are using XRP?

XRP is being used in production by major financial institutions.

SBI Holdings, Santander, PNC Bank, and Canadian Imperial Bank of Commerce (CIBC) lead institutional XRP adoption across Asia, Europe, and North America.

Notable implementations:

SBI Remit uses XRP and Ripple Payments to send funds from Japan to Southeast Asian countries, significantly reducing costs and processing times. SBI has been using this since 2017 and became the first Japanese remittance provider to use Ripple's On-Demand Liquidity.

PNC Financial Services became the first major US bank to join RippleNet, using Ripple's blockchain technology for international payment settlement, allowing commercial clients to process cross-border transactions in seconds rather than days.

XRP-powered corridors across 55+ countries now handle more than $15 billion in cross-border flows each month, with Ripple-linked payment solutions estimated to save users over $1.5 billion in aggregate remittance and FX fees versus legacy rails.

XRP's regulatory clarity in 2026

One factor that held XRP back for years was regulatory uncertainty.

The SEC sued Ripple in December 2020, alleging XRP was an unregistered security. After nearly five years of litigation, both parties withdrew their appeals in August 2025, formally closing the case.

The ruling's impact:

Ripple paid a $125 million civil penalty, far below the SEC's original $2 billion demand, and its executives were cleared of personal liability.

This provided XRP with regulatory clarity that no other major token in the United States has, enabling US exchanges to relist XRP and institutional investors to re-enter the market.

Since the case concluded, multiple US asset managers have applied for, and several have received approval for, spot XRP exchange-traded funds (ETFs).

Beyond payments: What else is XRP used for?

While cross-border payments remain XRP's primary use case, the XRP Ledger supports additional functions:

Trading and arbitrage — XRP trades on over 100 markets globally and is used for arbitrage, margin calls, and collateral management due to its speed and liquidity.

Decentralized exchange — The XRP Ledger contains a built-in decentralized exchange where payments automatically use the cheapest currency trade orders available to bridge currencies.

Tokenization and DeFi — The XRP Ledger supports token issuance, NFTs, and smart contracts, though these features are less developed than on Ethereum.

Financial inclusion — For people in countries with unstable local currencies or limited access to the global financial system, stablecoins and assets like XRP can provide access to the US dollar without needing a traditional bank account.

Using XRP as an investor

For individual investors, XRP offers a few practical applications beyond speculation.

Hold XRP for long-term exposure

If you believe cross-border payment infrastructure will continue to adopt blockchain technology, XRP provides direct exposure to that trend.

With Nexo, you can buy XRP and hold it in your account. XRP remains accessible 24/7 for trading, spending, or transferring.

Earn interest on XRP

Unlike banks using XRP strictly for payments, individual investors can put their XRP holdings to work.

Nexo offers up to 11.5% annual interest on XRP holdings, with rates varying by Loyalty Tier. This lets you earn interest on top of any potential price appreciation.

Borrow against XRP without selling

If you hold XRP long-term but need liquidity, selling isn't your only option.

With Nexo's Credit Line, you can use XRP as collateral and borrow funds at rates from 1.9%. This lets you maintain exposure to potential price increases in the future while accessing the funds you need today.

This strategy works particularly well if you believe XRP's price will rise as adoption grows, but you need funds in the short term.

Trade XRP

On Nexo, you can swap XRP for Bitcoin, Ethereum, stablecoins, or 100+ other assets. The platform operates 24/7, so you can act on opportunities regardless of traditional market hours.

Note: XRP availability and rates may vary by jurisdiction and Loyalty Tier.

XRP's place in 2026

XRP has moved from regulatory uncertainty to institutional adoption.

With the SEC case now concluded, Ripple has shifted its focus towards expansion and new product development, including the RLUSD stablecoin, which reached over $1 billion in market capitalization by November 2025 

For banks, XRP represents a way to modernize payment infrastructure without abandoning existing systems. For individuals, it offers exposure to blockchain-based payment infrastructure with regulatory clarity.

Frequently asked questions

1. What is XRP used for?

XRP is primarily used for cross-border payments, serving as a bridge currency that enables real-time currency conversion and settlement between different fiat currencies. Banks and financial institutions use it to reduce costs and settlement times.

2. How fast are XRP transactions?

XRP processes transactions in 3-5 seconds with settlement finality, compared to Bitcoin's 10 minutes and traditional bank transfers that can take 2-5 days.

3. How much does an XRP transaction cost?

XRP's median transaction fee stays around $0.0002 per transaction (less than a cent), even during high-volume periods, making it significantly cheaper than traditional payment methods.

4. Which banks use XRP?

Major banks using XRP or RippleNet include SBI Holdings (Japan), Santander (Europe), PNC Bank (US), and Canadian Imperial Bank of Commerce (CIBC), among over 300 financial institutions.

5. Is XRP still in a lawsuit with the SEC?

No. Both Ripple and the SEC withdrew their appeals in August 2025, formally closing the case after nearly five years of litigation. XRP now has regulatory clarity for retail sales in the US.

6. Can you earn interest on XRP?

Yes. Platforms like Nexo allow you to earn interest on XRP holdings, with rates depending on your Loyalty Tier.

7. What is Ripple's On-Demand Liquidity (ODL)?

On-Demand Liquidity is Ripple's product that uses XRP as a bridge asset for cross-border payments, converting the sender's currency into XRP, sending it over the XRP Ledger, then converting XRP into the recipient's currency for seamless, instant settlement.

8. How is XRP different from Bitcoin?

XRP processes transactions in 3-5 seconds versus Bitcoin's 10 minutes, with fees of $0.0002 compared to Bitcoin's typical fees, and handles 1,500 transactions per second versus Bitcoin's 3-7 TPS. XRP was designed for payments, while Bitcoin focuses on a store of value.

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