What is XRP, and how does the XRP Ledger work?
XRP is the native currency of the XRP Ledger, a payments-focused blockchain that runs without mining. It is also the asset at the centre of one of the most closely watched US securities cases in crypto.
Education only, not investment, tax or legal advice. Crypto-assets are high-risk — risk disclosure.
XRPThe short answer
XRP is the native cryptocurrency of the XRP Ledger, a public blockchain launched in June 2012. Instead of mining, independent validators agree on each new ledger version every few seconds. XRP pays the small fee that every transaction destroys and can be used as a bridge between currencies.
Key takeaways
- XRP is the built-in currency of the XRP Ledger, an open-source blockchain that went live in June 2012.
- The ledger has no miners: validators that each server chooses to trust vote until a supermajority agrees on the next ledger version.
- All 100 billion XRP were created at the start, most of it given to the company now called Ripple, and every transaction destroys a small fee.
- In SEC v. Ripple, a federal court found in 2023 that Ripple's institutional sales of XRP were unregistered securities offerings but its exchange sales were not; the case ended in 2025.
What is XRP, and who created it?
XRP is the cryptocurrency that is native to the XRP Ledger (often shortened to XRPL), a public blockchain. Every unit of XRP is interchangeable with every other unit, in the same way one dollar bill is as good as another2.
The project began in 2011, when three developers, David Schwartz, Jed McCaleb and Arthur Britto, set out to build a ledger that kept Bitcoin's open design but avoided the energy spent on mining. The XRP Ledger went live in June 20121.
In September 2012 the group started a company called NewCoin, quickly renamed OpenCoin, with Chris Larsen as chief executive. It became Ripple Labs in 2013 and is now simply called Ripple1. The founders gave the company 80% of all XRP1. Since September 24, 2020 a separate non-profit, the XRPL Foundation, has supported the open-source ledger1.
Three names that beginners often mix up Source: [1]
| Name | What it is | Who controls it |
|---|---|---|
| XRP Ledger (XRPL) | The public blockchain and its open-source software | No single owner; run by independent servers and validators |
| XRP | The native currency recorded on that ledger | Whoever holds the keys to each account |
| Ripple | A private company that received most of the original XRP | Its shareholders and management |
How does the XRP Ledger agree on transactions without mining?
Bitcoin uses mining: computers compete to solve puzzles, and the winner adds the next block. The XRP Ledger uses a different method called the consensus protocol. Each server operator picks a list of validators it trusts, known as its Unique Node List (UNL)3.
Validators share proposals for which transactions belong in the next ledger. Over several rounds, each validator adjusts its proposal towards those of the validators it trusts, until a supermajority agrees on the same set4. A new ledger version appears every few seconds4.
Figure · One consensus round on the XRP Ledger
- 01Transactions arrivesigned by account holders
- 02Validators proposeeach shares a candidate set
- 03Rounds of votingproposals move closer
- 04Supermajority agreesamong trusted validators
- 05New ledger versionevery few seconds
The documentation says consensus keeps working as long as fewer than 20% of a server's trusted validators are faulty, and that confirming an invalid transaction would need more than 80% of them to collude3. The trade-off is that safety depends on choosing validators who are unlikely to fail or collude together. For the wider picture, see our explainer on proof of work and proof of stake.
How many XRP exist, and can the supply change?
When the ledger was created there were 100 billion XRP. The founders gave 80 billion to the company and kept the remaining 20 billion2. In 2017 Ripple locked 55 billion XRP in escrow so that the amount entering circulation would be more predictable2. The plan: 55 escrows of 1 billion XRP, one unlocking on the first day of each month, with unused XRP re-escrowed at the back of the queue12. Until then, escrowed XRP cannot be used13.
XRP is not paid out to anyone for securing the network. Instead, every transaction must destroy a small amount of XRP as a fee; the fee goes to no one5. The minimum cost for a standard transaction is 10 drops, a drop being the smallest unit of XRP, and the cost rises when the network is busy, which makes spam expensive5.
Accounts must also hold a minimum balance called a reserve. On the main network at the time of writing, the base reserve is 1 XRP per address plus 0.2 XRP for each object the account owns on the ledger6. Validators can change these amounts through a voting process6.
Note
Why the reserve matters to newcomers
XRP held as a reserve cannot be sent while the account exists. A new wallet that shows a balance of exactly the reserve amount cannot pay anyone yet. Check the current reserve in the official documentation before funding an account6.
What is XRP used for?
The XRP Ledger was built mainly for payments. According to its documentation, XRP supports2:
- Direct payments between accounts.
- Cross-currency payments, where XRP can act as a bridge between two other currencies.
- Tokenization: other assets can be issued as tokens on the ledger.
- Trading on the decentralized exchange built into the ledger.
- Paying fees and reserves, which every account needs.
Our guide to cross-border payments explains the traditional system that bridge-currency designs like this try to improve on.
What did the courts decide in SEC v. Ripple?
On December 22, 2020 the US Securities and Exchange Commission sued Ripple and two executives, Christian Larsen and Bradley Garlinghouse, in federal court in Manhattan. It alleged that Ripple had raised over $1.3 billion by selling XRP since 2013 in an offering that was never registered7.
On July 13, 2023 Judge Analisa Torres ruled that Ripple's institutional sales of XRP, its direct sales to institutional buyers, were unregistered offers and sales of investment contracts. She also ruled that Ripple's programmatic sales on digital asset exchanges and its other distributions were not, and that the two executives' exchange sales were not either8. Our explainer on the Howey test covers the legal test behind these words.
The court entered final judgment on August 7, 2024, barring Ripple from future violations of the registration rules9 and imposing a civil penalty of $125,035,15010. In August 2025 the SEC and the defendants jointly dismissed their appeals, ending the case with the final judgment left in place10.
Figure · XRP and the XRP Ledger: key dates
- Jun 2012XRP Ledger goes live
- Sep 2012NewCoin founded
- 201755bn XRP in escrow
- Sep 2020XRPL Foundation
- Dec 2020SEC sues Ripple
- Jul 2023Summary judgment
- Aug 2024Final judgment
- Aug 2025Appeals dismissed
What are the specific risks of holding XRP?
- Concentrated holdings. Ripple received 80 billion of the original 100 billion XRP2. Large holders can affect supply in the market.
- Validator trust. The ledger's safety depends on servers choosing trusted validators that will not fail or collude together3.
- Legal and regulatory change. The Ripple case shows that the same asset can be treated differently depending on how it is sold8. Rules differ by country and can change; see who regulates crypto in the US.
- Platform risk. The SEC has warned that crypto platforms may lack the investor protections people expect from regulated markets11.
Risk warning
Crypto prices can fall sharply
The SEC describes investments in crypto asset securities as potentially exceptionally volatile and speculative11. Do not put in money you cannot afford to lose, and read our risk disclosure.
What mistakes do beginners make with XRP?
Common beginner mistakes
Confusing XRP with Ripple
Owning XRP is not owning shares in Ripple. The company and the currency are separate things with separate risks.
Forgetting the reserve
Part of every XRP balance is locked as a reserve6. Sending your whole balance will fail.
Reading the court ruling as a blanket verdict
The 2023 decision drew lines between types of sales8. It does not settle how every XRP transaction is treated in every country.
Leaving out the destination tag
Exchanges often share one XRP address among customers and use a destination tag to know whom to credit. Without it, a payment may need manual sorting out, and some receivers reject untagged payments14.
Before moving any XRP, read our guide to crypto wallets and keys: whoever controls the key controls the funds.
Frequently asked questions
Is XRP the same thing as Ripple?
No. XRP is the currency on the open-source XRP Ledger. Ripple is a private company that received most of the original XRP2. The ledger is run by independent servers and validators, not by Ripple alone.
Can XRP be mined?
Why does sending XRP destroy some of it?
Each transaction burns a small fee, at least 10 drops for a standard transaction, to make spam and network attacks expensive. The fee is not paid to any validator5.
Did a court say XRP is not a security?
A 2023 district-court ruling found that Ripple's sales of XRP on exchanges were not investment contracts, but its direct institutional sales were8. It was a decision about specific transactions, not every possible use of XRP.
The bottom line
XRP is the working currency of the XRP Ledger: it pays the fee that every transaction destroys, funds account reserves and can bridge payments between currencies. The ledger runs on validator consensus rather than mining, and most of the original supply went to Ripple. The SEC case is over, but it drew a line between how XRP was sold rather than declaring what XRP is everywhere, so treat legal status and price risk as open questions.
Sources
- History — XRPL.org (XRP Ledger documentation) Primary source
- What is XRP? — XRPL.org (XRP Ledger documentation) Primary source
- Consensus — XRPL.org (XRP Ledger documentation) Primary source
- Consensus Structure — XRPL.org (XRP Ledger documentation) Primary source
- Transaction Cost — XRPL.org (XRP Ledger documentation) Primary source
- Reserves — XRPL.org (XRP Ledger documentation) Primary source
- SEC charges Ripple and two executives over unregistered XRP sales (Press Release 2020-338) — U.S. Securities and Exchange Commission, 2020 Primary source
- SEC v. Ripple Labs, Inc., No. 20 Civ. 10832 (AT), Opinion and Order (July 13, 2023) — U.S. District Court for the Southern District of New York, 2023 Primary source
- Ripple Labs, Inc.: Order Under Rule 506(d)(2)(ii) Granting a Waiver (Release No. 33-11383) — U.S. Securities and Exchange Commission, 2025 Primary source
- Litigation Release No. 26369: SEC v. Ripple Labs, Inc., Bradley Garlinghouse, and Christian A. Larsen — U.S. Securities and Exchange Commission, 2025 Primary source
- Exercise Caution with Crypto Asset Securities: Investor Alert — Investor.gov, U.S. Securities and Exchange Commission, 2023 Primary source
- Ripple Escrows 55 Billion XRP for Supply Predictability — Ripple, 2017 Primary source
- Escrow — XRP Ledger documentation (xrpl.org), 2026 Primary source
- Source and Destination Tags — XRP Ledger documentation (xrpl.org), 2026 Primary source
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