What is XRP and what is it used for?

XRP is the native coin of the XRP Ledger, a blockchain built for moving money quickly and cheaply. It is closely linked to Ripple, a US company that holds a large amount of XRP and sells payment technology to financial firms. XRP and Ripple are often treated as the same thing, but one is a digital asset and the other is a business.

How does XRP work?

The XRP Ledger went live in June 2012. Its three creators, David Schwartz, Jed McCaleb and Arthur Britto, wanted a system that avoided the energy cost of bitcoin mining.

There are no miners. Instead, a set of independent servers called validators compare transactions and agree on a new version of the ledger every few seconds. No new XRP is ever created. All 100 billion units were made at launch, and a tiny amount is destroyed as a fee with each transaction.

The founders gave 80% of that supply to the company now called Ripple. Critics say this makes XRP more centralized than coins distributed through mining. Ripple says the ledger runs independently of it.

What is XRP used for?

The main pitch is cross-border payments. A bank or payment firm can convert one currency into XRP, send it across the ledger in seconds and convert it into another currency at the far end, avoiding the need to keep money parked in foreign accounts.

Critics note that adoption by large banks has been slower than early promotion suggested, and that many firms working with Ripple used its software without using XRP itself. Much of the day-to-day activity in XRP is trading on exchanges. The ledger also supports other tokens, including stablecoins.

What was the SEC v. Ripple case?

In December 2020, the Securities and Exchange Commission sued Ripple and two of its executives, alleging that the company's sales of XRP were an unregistered offering of securities.

In July 2023, federal judge Analisa Torres issued a split decision. Ripple's direct sales to institutional investors broke securities law. Its sales through public exchanges, where buyers did not know who the seller was, did not. In August 2024, the court ordered Ripple to pay a civil penalty of about $125 million, far below the roughly $2 billion the SEC had sought, and barred it from future violations.

How did the case end?

Both sides appealed, then withdrew. On August 7, 2025, the SEC and Ripple jointly dismissed their appeals. The district court's judgment stands, including the $125,035,150 penalty and the injunction against Ripple.

The case never produced an appeals court ruling, so the 2023 decision is not binding on other courts. Regulators have since gone further. A joint SEC and CFTC interpretation in March 2026 named XRP among the crypto assets it treats as digital commodities, not securities. The guide to what the SEC does in crypto covers the agency's wider approach.