Author: Daniel Li, CoinVoice
Recently, the cryptocurrency market has welcomed multiple favorable developments, with Ripple (XRP), as an established public chain, becoming the focus of the market. The news of U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s impending resignation has sparked market expectations for a more favorable regulatory environment. Meanwhile, the protracted legal dispute between Ripple and the SEC is also expected to reach a resolution, with court rulings repeatedly sending positive signals to Ripple, clearing some development obstacles for XRP. This series of favorable developments has propelled XRP's price to a strong rebound, skyrocketing over 250% in just one month, with a single-day increase exceeding 35%, reaching a new high in nearly three years and reigniting investor enthusiasm.
As one of the pioneers in the blockchain field, XRP has focused on cross-border payment scenarios since its launch in 2012, gaining favor from financial institutions due to its efficiency, low cost, and technological innovation. However, the growth path of this classic token has not been smooth, facing pressure from market competition and frequent setbacks due to regulatory controversies. Now, with the regulatory environment gradually shifting and market confidence being boosted, XRP seems to be seizing this historic opportunity to redefine its future market positioning. As a veteran in the cryptocurrency field, can XRP open up new innovative tracks again and lead the future of blockchain payments? Let’s explore further.
01, Regulatory Favor: SEC Revenge Concept Coin XRP Hits Three-Year High
With the conclusion of the 2024 U.S. presidential election, Republican candidate Donald Trump was elected as the next president with a high vote count. During the campaign, Trump promised to make the U.S. the 'global cryptocurrency capital' and strongly supported the cryptocurrency industry, a stance that undoubtedly brought enormous confidence to the market, driving up the prices of several cryptocurrencies, including XRP. In the wave of market recovery, XRP, dubbed the 'revenge concept coin,' has seized a turning point, setting a new high in three years and becoming the focus of investor attention. However, the rise of XRP is not solely due to Trump's campaign promises but also stems from a series of changes in the regulatory environment and key developments in Ripple's four-year difficult litigation with the SEC.
Regulatory changes bring catalysts to the market
Since the end of 2020, Ripple has faced a lawsuit from the SEC for allegedly raising funds through unregistered securities, resulting in four years of regulatory pressure on XRP. The SEC accused Ripple of issuing XRP since 2013, raising $1.3 billion, and claimed that its actions violated securities laws. This lawsuit not only caused a significant drop in XRP's price but also forced multiple exchanges to suspend XRP trading, severely undermining market confidence.
However, with the gradual conclusion of legal disputes in 2024, XRP has welcomed a long-awaited turning point. In 2023 and 2024, the ruling by New York federal judge Analisa Torres brought significant breakthroughs for Ripple. She determined that Ripple's sale of XRP to retail investors did not violate securities laws, while the sales to institutional investors were deemed illegal, requiring Ripple to pay a fine of $125 million. This ruling is significantly lower than the $2 billion fine initially demanded by the SEC and leaves space for Ripple's future operations. More importantly, this ruling released signals to the market regarding the future development of XRP, alleviating excessive concerns about regulation.
The new SEC chairman may bring more favorable developments for XRP
Another important factor driving XRP's recovery is the news of SEC Chairman Gary Gensler's resignation. Gensler has been one of the most controversial regulators in the cryptocurrency industry in recent years, and his strict regulatory policies once left many crypto projects in dire straits. However, with Gensler set to resign in January 2025, market expectations for the new SEC chairman have increased significantly. Many anticipate that the new SEC leadership may adopt a more lenient and friendly attitude toward the cryptocurrency industry, bringing hope to XRP and other projects that have been subjected to regulatory pressure.
(The Washington Post) reported that Trump's advisory team is evaluating several candidates for SEC chairman, including officials and financial executives who have publicly supported cryptocurrencies. The market generally believes that these candidates may take a more friendly stance on regulatory policies for cryptocurrencies. If the new SEC chairman indeed promotes a policy shift as expected, Ripple's litigation may welcome a settlement or even dismissal, fundamentally changing the regulatory environment for the entire cryptocurrency industry. This is undoubtedly a significant policy advantage for suppressed projects such as Ripple, Binance, and Coinbase.
Ripple changes the litigation predicament through political action
Ripple's 'revenge road' relies not only on legal and regulatory changes but also on the company's active engagement in the political field as part of its strategy. According to CoinDesk, Ripple Labs has injected $25 million into the Fairshake Political Action Committee (PAC) in the cryptocurrency industry, aiming to influence the 2026 U.S. congressional elections and promote more favorable regulatory policies for cryptocurrencies. This initiative marks the company's attempt to leverage political means to reverse its litigation predicament with the SEC through policy reform and to secure a more favorable legal and regulatory environment for XRP.
Additionally, reports from Reuters indicate that several cryptocurrency companies, including Ripple (such as Circle, Kraken, Coinbase, a16z, Paradigm, etc.), are competing for seats on the cryptocurrency advisory committee proposed by Trump. This committee will become an important platform for cryptocurrency policy reform, and participating companies will have the opportunity to directly influence future policy directions, especially under the cryptocurrency-friendly policy framework promoted by the Trump administration. If Ripple can secure a position in this process, it will be able to gain more support for XRP at the policy level, thus obtaining more freedom in the future regulatory environment.
02, XRP: Innovator of traditional financial payment systems
For decades, the global financial payment system has been dominated by traditional banking settlements and payment methods. Although these systems have certain advantages in stability and security, with the deepening of globalization and the rapid development of e-commerce, traditional financial payment systems have exposed a series of pain points that need urgent resolution. High transaction fees, inefficient payment processing speeds, and the complexity and high costs of cross-border payments have become bottlenecks hindering global financial liquidity and market development. To address these issues, Ripple has launched XRP and the XRP Ledger, quickly emerging as an important force driving innovation in traditional financial payment systems through its innovative technology architecture and unique business model.
What are XRP and Ripple?
XRP is the native cryptocurrency of the Ripple network and one of the core technologies designed by Ripple to address pain points in the global payment system. Unlike traditional payment methods such as bank transfers and SWIFT, XRP provides a brand new solution for global payments through blockchain technology. Ripple has greatly improved transaction speed, reduced costs, and provided cross-border payment capabilities that connect different currencies through its innovative Ripple Protocol Consensus Algorithm (RPCA) and decentralized XRP Ledger. Essentially, XRP acts as a bridge currency, enabling efficient and low-cost exchanges between different fiat currencies, offering a smoother path for global payments and cross-border settlements.
Ripple, a tech company dedicated to promoting innovation in the financial system, was founded in 2012 by Chris Larsen and Jed McCaleb. Ripple's initial goal was to transform existing financial payment systems through blockchain technology, particularly to address the high costs and inefficiencies in traditional banking settlement systems. Ripple's vision is not just to create a new cryptocurrency but, more importantly, to establish a decentralized and global financial network that connects banks, payment service providers, and financial institutions worldwide through RippleNet, enabling faster, cheaper, and more efficient payments and transactions.
Technological advantages of XRP: efficient, low-cost, and high throughput
One of XRP's greatest advantages is its use of the XRP Ledger (XRPL) technology architecture. Unlike traditional blockchain projects like Bitcoin and Ethereum, XRP employs a unique consensus mechanism, namely the Ripple Protocol Consensus Algorithm (RPCA). This algorithm does not rely on traditional proof-of-work (PoW) or proof-of-stake (PoS) mechanisms but instead reaches consensus through a group of independent validator nodes, ensuring the validity of transactions. This design enables the XRP network to complete transaction validation in seconds, and the transaction fees are relatively low, typically only 0.00001 XRP, greatly reducing the common high transaction fees and time delays found in traditional financial payments.
Compared to Bitcoin's transaction processing speed of only 7 transactions per second, the XRP Ledger's processing speed can reach 1500 transactions per second, and with continuous technological optimization, future throughput is expected to increase further. This high transaction processing capability makes XRP an ideal choice for cross-border payments and capital transfers, especially in scenarios requiring quick settlements and large payments, where XRP demonstrates unmatched advantages.
Role of XRP in the global payment system: Innovation in cross-border payments
One of XRP's core advantages is its ability to provide efficient and low-cost payment solutions between different countries and regions, especially in the field of cross-border payments. Traditional cross-border payments typically rely on multiple intermediary banks and complex settlement processes, which not only increase the time cost of transactions but also lead to high payment fees. According to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), traditional cross-border payments usually take 2 to 3 business days, and transaction fees typically range from 5% to 10% of the payment amount. This inefficient and costly payment method has become a bottleneck in global financial transactions and commercial activities.
XRP has fundamentally changed this situation through its innovative On-Demand Liquidity (ODL) technology. The ODL technology allows users to make instant cross-border payments using XRP as a bridge currency without pre-funding. For example, when a business wants to transfer funds from the U.S. to Japan, traditional methods require reliance on multiple intermediary banks and may take several days to complete the transaction. With XRP, users can complete payments in seconds, and the fees are far lower than traditional payment methods. This efficient, convenient, and low-cost payment method significantly enhances the efficiency of global trade and capital flow.
Through collaborations with numerous global banks, payment service providers, and financial institutions, Ripple has gradually established a vast payment network worldwide. This allows XRP to play an important role not only in the traditional financial sector but also to achieve breakthroughs in payment and remittance fields in emerging markets and developing countries, further promoting financial inclusion.
Advantages of Ripple and XRP: The combination of bank cooperation and decentralization
XRP's success in the global payment system is attributable to its deep cooperation with traditional banks and financial institutions. Ripple has consistently adhered to the philosophy of 'cooperating with rather than opposing traditional financial institutions,' rapidly promoting XRP through partnerships with leading financial institutions worldwide. For instance, Ripple has established strategic collaborations with several major banks and payment platforms, including Bank of America, Credit Suisse, and Mitsubishi UFJ Financial Group, to promote the application of XRP in cross-border payments and settlements. These partnerships not only enhance XRP's market recognition but also lay a solid foundation for further expanding financial services.
However, the integration of XRP with traditional banking systems does not mean it loses its decentralized characteristics. The XRP Ledger is a decentralized public blockchain that anyone can join and become a validator node. This means that even if Ripple no longer exists, the XRP network can continue to operate. The decentralized design ensures that XRP is not controlled by a single entity, which is a key advantage distinguishing it from traditional financial systems.
In the future, XRP may not only be limited to cross-border payments, but its application potential in emerging fields such as decentralized finance (DeFi) and asset tokenization is also worth looking forward to. As Ripple continues to strengthen its cooperation with global banks and financial institutions and promotes the adoption of XRP in more financial sectors, XRP is expected to become an indispensable part of the global payment system, emerging as a new global currency.
03, From traditional finance to the Web3 industry: Ripple's long-term layout and the future of XRP
Although Ripple is a blockchain company, its past focus has primarily been on the traditional financial sector. With the rapid development of global fintech, the transition from traditional finance to the Web3 industry has become the mainstream trend in financial markets, and Ripple has gradually begun to lay out in the Web3 industry. However, unlike many cryptocurrency projects, Ripple has not limited its vision to the purely digital currency field but is promoting the diversification of its products and services from a broader perspective. Ripple focuses on the decentralized finance (DeFi), stablecoins, and asset tokenization areas within the Web3 sector. It is worth noting that although XRP itself does not play a direct role in Ripple's strategic directions, this long-term layout by Ripple bestows a broader application prospect for the future of XRP.
Ripple's robust strategy: Compliance-based expansion into Web3 collaboration
Unlike many cryptocurrency projects that are short-sighted and speculative, Ripple has consistently adhered to a robust core strategy, committed to promoting innovation within a compliant framework. Throughout the four-year litigation process with the U.S. Securities and Exchange Commission (SEC), Ripple's strategic direction has become increasingly clear, further reinforcing its philosophy of steady development. From initially positioning XRP as a cross-border payment tool to now actively laying out Web3, Ripple has maintained compliance and closely collaborated with traditional financial institutions. This strategy not only enhances market trust in Ripple but also makes its layout in the Web3 sector more forward-looking and sustainable.
In terms of compliance, Ripple has achieved significant accomplishments. The company and its subsidiaries hold nearly 40 U.S. money transmission licenses, New York BitLicense, major payment institution licenses from the Monetary Authority of Singapore, and registration as a Virtual Asset Service Provider (VASP) from the Central Bank of Ireland, ensuring its legal operations in multiple countries and regions. These qualifications provide Ripple with strong compliance assurance and further enhance its credibility as a global financial service provider.
Ripple's global network of partnerships also provides strong support for its expansion in the Web3 space. The company has established deep collaborations with over 100 banks and financial institutions worldwide, including well-known institutions such as Santander Bank and Mitsubishi Bank. These collaborations not only enhance Ripple's influence in the traditional financial sector but also provide more practical application scenarios for XRP. Additionally, Ripple collaborates with platforms like Archax to actively promote the tokenization of real-world assets (RWA), facilitating the smooth entry of traditional financial assets into the blockchain ecosystem. At the same time, Ripple is also laying out in the 'institutional-grade DeFi' space, creating new opportunities for further collaboration with financial institutions through partnerships with platforms like OpenEden and investing in tokenized government bonds and other projects. Recently, proposals for XRP ETFs submitted by companies like Bitwise Asset Management have sparked widespread attention in the market regarding Ripple's future potential, further validating its strategic advantages in integrating Web3 and traditional finance.
XRP and Web3: Challenges and opportunities in adapting to transformation
Although Ripple has gradually shifted its strategic focus from traditional cross-border payments to the Web3 sector, this does not mean that XRP can adapt to this transformation without obstacles. Unlike the traditional cross-border payment market, the core values of the Web3 industry lie in decentralization, digital asset liquidity, and smart contract applications. These characteristics make XRP's role in Web3 fundamentally different from its function as a bridge currency in cross-border payments. Despite XRP's technological advantages and efficient transaction mechanisms, its biggest challenge in the Web3 ecosystem is how to closely align with the demands of emerging areas such as decentralized finance (DeFi). To find a new positioning in this emerging field, Ripple must further promote the deep integration of XRP with Web3.
Ripple is expanding the application scenarios of XRP through several initiatives, gradually penetrating other key technology fields within the Web3 industry. According to BlockBeats, on November 30, FOX Business cited informed sources stating that the New York Department of Financial Services has indicated it will approve Ripple's launch of a new stablecoin product—RLUSD, set to officially launch on December 4. In the future, the RLUSD stablecoin will serve as a complementary tool for XRP, enhancing its role in Ripple's payment solutions. This strategy not only helps consolidate XRP's market position in the payment field but also opens up new opportunities for its application in Web3. Additionally, Ripple is actively promoting the construction of the XRPL ecosystem by funding developers and supporting innovative applications in the global Web3 sector. Through these initiatives, Ripple is actively advancing the development of Web3 technology based on XRP, providing innovative solutions for emerging areas such as decentralized finance (DeFi).
What is the future prospect of XRP?
After Trump's election, the cryptocurrency industry holds an optimistic attitude towards future regulatory policies, bringing new opportunities for the traditional financial sector, which has long sought entry into the cryptocurrency market. As Ripple, which has long focused on the traditional financial sector, has attracted significant attention from investors due to its potential and influence in cross-border payments. The recent price trend of XRP also reflects this trend, as XRP recently broke through a dynamic resistance level that has stood for five years. Some optimistic cryptocurrency analysts believe that XRP's next target price could reach $4.20, and with market sentiment driving this and favorable policy support, XRP is expected to break through the historical high of $3.317 set in 2018 in the short term.
However, the future prospects of XRP remain contentious. On one hand, the new chairman of the U.S. Securities and Exchange Commission (SEC) has yet to be determined, which leaves Ripple facing certain regulatory uncertainties and potential compliance risks. On the other hand, since the launch of XRP in 2012, its performance has not been as outstanding as expected. Although Ripple announced plans to utilize XRP for cross-border payments, there has been little evidence to suggest that the actual usage frequency of XRP in global financial services has met the anticipated targets. Additionally, Ripple has not publicly disclosed the profitability of its cross-border payment business, relying more on the sale of XRP tokens to sustain operations, resulting in substantial benefits for its founding team and shareholders. It is noteworthy that the vast majority of XRP tokens are still held by Ripple, and Ripple sells a certain amount of XRP each quarter.
Furthermore, XRP's past performance has not significantly changed the public's perception of its potential in the Web3 sector, leading some investors to question its future market role. However, Ripple has clearly recognized this challenge and is taking proactive measures to enhance XRP's future development potential. Recently, Ripple launched the RLUSD stablecoin, expanding the XRPL ecosystem, and some institutions like Bitwise Asset Management have also submitted proposals for XRP ETFs, indicating that XRP remains a key component of Ripple's future development. Despite challenges, the future of XRP is still worth looking forward to.
