Author: Daniel Li, CoinVoice
Recently, the cryptocurrency market has welcomed multiple positive developments, and as an established public chain, Ripple's XRP has become the focus of the market. The news that Gary Gensler, the chairman of the SEC, is about to resign has ignited market expectations for a more favorable regulatory environment. Meanwhile, the long-standing legal disputes between Ripple and the SEC are also expected to reach resolution, with court rulings repeatedly sending positive signals for Ripple, clearing some developmental obstacles for XRP. This series of favorable developments has propelled XRP's price to a strong rebound, surging over 250% in just one month, with a single-day increase exceeding 35%, reaching a new high in nearly three years and rekindling 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 among financial institutions for its efficiency, low cost, and technological innovation. However, the growth path of this classic token has not been smooth, facing pressures from market competition and frequent setbacks due to regulatory controversies. Now, as the regulatory environment gradually shifts and market confidence rebounds, XRP seems to be seizing this historic opportunity to redefine its future market positioning. Can XRP, as a veteran in the cryptocurrency field, open a new innovative path and lead the future of blockchain payments? Let's explore.
01. Regulatory Favor and SEC's Revenge Concept Coin XRP Reaches a 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 turn the U.S. into the 'global cryptocurrency capital' and strongly supported the cryptocurrency industry, which undoubtedly brought tremendous confidence to the market and drove up the prices of several cryptocurrencies, including XRP. Amid this wave of market recovery, XRP, dubbed the 'revenge concept coin,' seized the opportunity to reach a three-year high and became the focus of investor attention. However, XRP's rise is not solely due to Trump's campaign promises but also stems from a series of changes in the regulatory environment and key progress in Ripple's four-year-long difficult litigation with the SEC.
Regulatory changes provide catalysts for the market
Since the end of 2020, Ripple has been sued by the SEC for allegedly raising funds through unregistered securities, facing four years of regulatory pressure for XRP. The SEC accused Ripple of issuing XRP since 2013, raising $1.3 billion, and deemed its actions violated securities laws. This lawsuit has not only caused a significant drop in XRP's price but also forced multiple exchanges to suspend XRP trading, severely impacting market confidence.
However, with the gradual conclusion of legal disputes in 2024, XRP welcomed a long-awaited turning point. In 2023 and 2024, New York Federal Judge Analisa Torres made rulings that brought important breakthroughs for Ripple. She ruled that Ripple's sale of XRP to retail investors did not violate securities law, while the sales to institutional investors were deemed illegal, resulting in Ripple being ordered to pay a $125 million fine. This ruling is significantly lower than the $2 billion initially sought by the SEC, leaving room for Ripple's future operations. More importantly, this ruling released signals to the market about XRP's future development and alleviated excessive regulatory concerns.
The new SEC chairman may bring more favorable developments for XRP
Another important factor driving the recovery of XRP 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 plunged many crypto projects into difficulty. However, as Gensler is set to leave office in January 2025, market expectations for the new SEC chairman have surged. Many anticipate that the new SEC leadership may adopt a more lenient and friendly stance towards the cryptocurrency industry, bringing hope for XRP and other projects that have faced regulatory suppression.
(Washington Post) reports 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 adopt a more friendly stance on cryptocurrency regulatory policies. If the new SEC chairman truly promotes a policy shift as expected, Ripple's lawsuit may reach a settlement or even be dismissed, fundamentally changing the regulatory environment for the entire cryptocurrency industry. This is undoubtedly a major policy benefit for previously suppressed projects like Ripple, Binance, and Coinbase.
Ripple Changes Litigation Predicament through Political Action
Ripple's 'Road to Revenge' relies not only on legal and regulatory changes but also on the company's active investment in the political arena 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 cryptocurrency regulatory policies. This move marks the company's attempt to leverage political means to reverse its litigation predicament with the SEC and secure a more favorable legal and regulatory environment for XRP.
Moreover, 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 within 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 achieving greater freedom in the future regulatory environment.
02. XRP: Innovator of Traditional Financial Payment Systems
Over the past few decades, the global financial payment system has been dominated by traditional bank settlement and payment methods. While these systems have certain advantages in terms of stability and security, the deepening of globalization and the rapid development of e-commerce have exposed a series of pain points in traditional financial payment systems that urgently need to be addressed. 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 with its innovative technological architecture and unique business model.
What are XRP and Ripple?
XRP is the native cryptocurrency of the Ripple network and is 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 new solution for global payments through blockchain technology. Ripple significantly enhances transaction speed, reduces costs, and provides 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, thus providing a smoother path for global payments and cross-border settlements.
Ripple, as a technology company dedicated to promoting financial system innovation, was founded in 2012 by Chris Larsen and Jed McCaleb. The company's initial goal was to reform the existing financial payment system using blockchain technology, particularly addressing the high costs and inefficiencies in traditional bank 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.
Technical Advantages of XRP: Efficient, Low-Cost, and High Throughput
One of the greatest advantages of XRP is its use of the XRP Ledger (XRPL) technology architecture. Unlike traditional blockchain projects such as Bitcoin and Ethereum, XRP employs a unique consensus mechanism called the Ripple Protocol Consensus Algorithm (RPCA). This algorithm does not rely on traditional proof-of-work (PoW) or proof-of-stake (PoS) mechanisms but achieves consensus through a set of independent validator nodes, ensuring transaction validity. This design allows the XRP network to complete transaction validation in seconds, with transaction fees relatively low, typically only 0.00001 XRP, significantly reducing the high transaction fees and time delays commonly seen in traditional financial payments.
Compared to Bitcoin's transaction processing speed of only 7 transactions per second, the XRP Ledger can achieve a processing speed of up to 1,500 transactions per second, and with continuous technological optimization, future throughput will further increase. This efficient transaction processing capability makes XRP an ideal choice for cross-border payments and fund transfers, especially in scenarios that require quick settlements and large payments, where XRP demonstrates unparalleled advantages.
The Role of XRP in the Global Payment System: A Revolution in Cross-Border Payments
One of XRP's core advantages is its ability to provide efficient and low-cost payment solutions across different countries and regions, especially in the cross-border payment sector. 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 make payment fees exorbitant. According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), traditional cross-border payment times usually require 2 to 3 business days, and 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 business activities.
XRP has fundamentally changed this situation with its innovative On-Demand Liquidity (ODL) technology. ODL technology allows users to make instant cross-border payments using XRP as a bridge currency without pre-funding. For instance, when a company wants to transfer funds from the U.S. to Japan, the traditional method requires reliance on multiple intermediary banks and may take days to complete the transaction. However, with XRP, users can complete the payment in seconds, and the fees are significantly lower than traditional payment methods. This efficient, convenient, and low-cost payment method greatly enhances the efficiency of global trade and capital flow.
Ripple has gradually built a vast payment network globally through partnerships with numerous banks, payment service providers, and financial institutions. This enables XRP to play an important role not only in the traditional financial sector but also to make breakthroughs in payments and remittances in emerging markets and developing countries, further promoting the development of financial inclusivity.
Advantages of Ripple and XRP: The Combination of Bank Collaboration and Decentralization
XRP's success in the global payment system is inseparable from its deep cooperation with traditional banks and financial institutions. Ripple has consistently adhered to the philosophy of 'collaborating with traditional financial institutions rather than opposing them,' establishing partnerships with leading financial institutions worldwide, allowing XRP to gain rapid promotion within the existing financial infrastructure. For example, Ripple has engaged in strategic collaborations with major banks and payment platforms such as 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 its further expansion into the financial services sector.
However, the combination of XRP with the traditional banking system 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 still continue to operate. The decentralized design ensures that XRP is not controlled by a single entity, which is a key advantage that distinguishes it from traditional financial systems.
In the future, XRP may not be limited to the cross-border payment sector; its application potential in emerging fields such as decentralized finance (DeFi) and asset tokenization is also worth anticipating. As Ripple continues to strengthen collaborations with global banks and financial institutions, and promotes the implementation of XRP in more financial domains, XRP is expected to become an indispensable part of the global payment system, evolving into a new global currency.
03. From Traditional Finance to Web3 Industry: Ripple's Long-term Layout and XRP's Future
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 a mainstream trend in the financial market, and Ripple has also begun to gradually layout 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 areas of decentralized finance (DeFi), stablecoins, and asset tokenization within the Web3 domain. Notably, although XRP itself does not have a direct role in Ripple's strategic directions, this long-term layout by Ripple provides XRP with a broader application prospect for the future.
Ripple's Robust Strategy: Compliance-based, Expanding Web3 Collaboration
Unlike many cryptocurrency projects that pursue short-term gains and exhibit speculative behavior, Ripple consistently adheres to a robust core strategy, committed to promoting innovation within a compliant framework. Throughout the four-year lawsuit with the U.S. Securities and Exchange Commission (SEC), Ripple's strategic direction has become increasingly clear, further reinforcing its concept of steady development. From initially positioning XRP as a cross-border payment tool to actively laying out Web3 today, 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 domain 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, a New York BitLicense, a major payment institution license from the Monetary Authority of Singapore, and registration as a virtual asset service provider (VASP) with the Central Bank of Ireland, ensuring their legal operations in multiple countries and regions. These qualifications provide Ripple with substantial 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 field. The company has established deep cooperation with over 100 banks and financial institutions worldwide, including renowned institutions like 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 is actively promoting the tokenization of real-world assets (RWA) through partnerships with platforms like Archax, facilitating the smooth entry of traditional financial assets into the blockchain ecosystem. Meanwhile, Ripple is also laying out plans in the 'institutional-level DeFi' space, creating new opportunities for further collaboration with financial institutions by investing in projects like tokenized government bonds. Recently, XRP ETF proposals submitted by companies like Bitwise Asset Management have sparked widespread market attention towards Ripple's future potential, further validating its strategic advantages in the integration of 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 field, this does not mean that the XRP token 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 the application of smart contracts, which makes XRP's role in Web3 fundamentally different from its function as a bridge currency in cross-border payments. Despite the technological advantages and efficient transaction mechanisms of XRP still being commendable, its greatest challenge in the Web3 ecosystem is how to closely align with the demands of emerging fields 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 multiple initiatives, gradually penetrating other key technological fields in the Web3 industry. According to BlockBeats, on November 30, FOX Business reported that the New York Department of Financial Services had informed Ripple that it would approve the launch of its new stablecoin product—RLUSD—planned for official release on December 4. In the future, the RLUSD stablecoin will serve as a supplementary 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 new opportunities for its applications in Web3. At the same time, Ripple is actively promoting the construction of the XRPL ecosystem by funding developers and supporting innovative applications in the global Web3 field. Through these initiatives, Ripple is advancing Web3 technology based on XRP, providing innovative solutions for emerging fields such as decentralized finance (DeFi).
What are the future prospects for XRP?
After Trump's election, the cryptocurrency industry held an optimistic view of future regulatory policies, which has brought new opportunities for the traditional financial industry that has long sought to enter the cryptocurrency market. Ripple, which has long focused on the traditional financial sector, has attracted significant investor attention due to its potential and influence in cross-border payments. The recent price trend of XRP also reflects this trend, with XRP recently breaking through a 5-year dynamic resistance level. Some optimistic crypto analysts believe that XRP's next target price could reach $4.2, and with market sentiment 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 not yet been determined, leaving Ripple facing a certain degree of regulatory uncertainty and potential compliance risks. On the other hand, since XRP's launch in 2012, its performance has not been as outstanding as expected. Although Ripple has announced plans to use XRP for cross-border payments, there is little evidence indicating that XRP's actual usage frequency in global financial services meets the expected goals. Furthermore, Ripple has not publicly disclosed the profitability of its cross-border payment business, relying more on the sales of XRP tokens to maintain operations, resulting in substantial profits for its founding team and shareholders. Notably, the vast majority of XRP tokens remain in the hands of Ripple, and the company sells a certain amount of XRP every quarter.
Moreover, XRP's past performance has not significantly changed public perception of its potential in the Web3 field, leading some investors to question its future market role. However, Ripple has clearly recognized this challenge and is taking active measures to enhance XRP's future development potential. Recently, Ripple launched the RLUSD stablecoin to expand the XRPL ecosystem, and institutions like Bitwise Asset Management have submitted XRP ETF proposals. These initiatives indicate that XRP remains a key component of Ripple's future development. Despite facing challenges, the future of XRP is still promising.
