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 market attention. News of SEC Chair Gary Gensler's impending departure has ignited market expectations for a more favorable regulatory environment. Meanwhile, Ripple's long-standing legal dispute with the SEC is also expected to be resolved, 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 experience a strong rebound, surging over 250% within just a month, with a single-day increase exceeding 35%, reaching a nearly three-year high 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 among financial institutions for its efficiency, low cost, and technological innovation. However, the growth path of this classic token has not been smooth; it faces pressure from market competition and has been frequently hindered by regulatory controversies. Now, in the context of a gradually shifting regulatory environment and a boost in market confidence, XRP seems to be seizing this historic opportunity to redefine its future market positioning. As a veteran in the cryptocurrency space, can XRP once again open up innovative paths and lead the future of blockchain payments? Let's explore.
01 Regulatory benefits and the revenge concept coin XRP reaches a three-year high.
With the conclusion of the 2024 U.S. presidential election, Republican candidate Donald Trump has been 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 crypto industry, a stance that undoubtedly boosted market confidence and led to price increases in several cryptocurrencies, including XRP. In this wave of market recovery, XRP, dubbed the 'revenge concept coin,' has welcomed a turning point and reached a three-year high, becoming 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 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 been sued by the SEC for allegedly raising funds through unregistered securities, facing four years of regulatory pressure. The SEC accused Ripple of issuing XRP since 2013 and raising $1.3 billion, claiming that its actions violated securities laws. This lawsuit not only caused XRP's price to plummet, but also forced multiple exchanges to suspend XRP trading, severely damaging market confidence.
However, with the legal disputes gradually coming to an end in 2024, XRP has 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 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 $125 million fine. This ruling was significantly lower than the SEC's initial demand for a $2 billion fine and left space for Ripple's future operations. More importantly, this judgment released signals about the market's expectations for XRP's future development, alleviating excessive regulatory concerns.
The new SEC chair may bring more benefits to XRP.
Another important factor driving XRP's recovery is the news of SEC Chair Gary Gensler's departure. Gensler has been one of the most controversial regulators in the cryptocurrency industry in recent years, and his strict regulatory policies have plunged many crypto projects into difficulties. However, with Gensler set to leave in January 2025, market expectations for the new SEC chair have increased significantly. Many expect that the new SEC leadership may adopt a more lenient and friendly attitude towards the crypto industry, bringing hope to XRP and other projects that have been suppressed by regulation.
(The Washington Post) Reports that Trump's advisory team is evaluating several candidates for SEC chair, including officials and financial executives who have publicly supported cryptocurrencies. The market generally believes that these candidates may take a more friendly stance on cryptocurrency regulatory policy. If the new SEC chair truly pushes for a policy shift as expected, then Ripple's lawsuit may lead to a settlement or even dismissal, and the regulatory environment for the entire cryptocurrency industry could fundamentally change. This is undoubtedly a significant policy boon for suppressed projects like Ripple, Binance, Coinbase, etc.
Ripple changes litigation dilemmas 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 tactics. According to CoinDesk reports, 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 friendlier cryptocurrency regulatory policies. This move indicates that Ripple is beginning to utilize political means to attempt to reverse its litigation dilemma with the SEC through policy reforms and to secure a more favorable legal and regulatory environment for XRP.
Furthermore, 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 planned by Trump. This committee will become an important platform for cryptocurrency policy reform, and companies involved will have the opportunity to directly influence future policy directions, especially under the crypto-friendly policy framework promoted by the Trump administration. If Ripple can secure a place in this process, it will be able to advocate for more support for XRP at the policy level, thus gaining more 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. Although these systems have certain advantages in stability and security, the deepening of globalization and the rapid development of e-commerce have exposed a series of pain points that need to be addressed in traditional financial payment systems. High transaction fees, inefficient payment processing speeds, and the complexity and high costs of cross-border payments have become bottlenecks obstructing global financial liquidity and market development. To address these issues, Ripple launched XRP and the XRP Ledger, quickly emerging as an important force driving the reform of traditional financial payment systems with its innovative technological architecture and unique business model.
What are XRP and Ripple?
XRP is the native cryptocurrency within the Ripple network and is one of the core technologies designed by Ripple to address the pain points of 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, through its innovative Ripple Protocol Consensus Algorithm (RPCA) and decentralized XRP Ledger, greatly improves transaction speed, lowers costs, and provides the ability to connect different currencies across borders. Essentially, XRP serves as a bridge currency, enabling efficient and low-cost exchanges between different fiat currencies, providing a smoother path for global payments and cross-border settlements.
Ripple is a technology company dedicated to driving innovation in the financial system and was founded in 2012 by Chris Larsen and Jed McCaleb. The original goal of Ripple was to transform existing financial payment systems through blockchain technology, particularly to address the high costs and inefficiencies in traditional bank settlement systems. Ripple's vision is not merely to create a new cryptocurrency but to establish a decentralized, global financial network that connects banks, payment service providers, and financial institutions worldwide through RippleNet, enabling faster, cheaper, and more efficient payments and transactions.
XRP's technical advantages: efficient, low-cost, and high throughput.
One of XRP's greatest advantages lies in its use of the XRP Ledger (XRPL) technology architecture. Unlike traditional blockchain projects like Bitcoin and Ethereum, XRP employs a unique consensus mechanism known as 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 the validity of transactions. This design allows the XRP network to complete transaction verification in seconds, with transaction fees being relatively low, typically only 0.00001 XRP, significantly reducing the high transaction fees and time delays commonly found in traditional financial payments.
In contrast to Bitcoin's transaction processing speed of only 7 transactions per second, the XRP Ledger can process up to 1,500 transactions per second, and with continuous technological optimization, future throughput is expected to further improve. This high transaction processing capability makes XRP an ideal choice for cross-border payments and capital transfers, especially in scenarios that require fast settlements and large payments, where XRP demonstrates unparalleled advantages.
The 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, low-cost payment solutions between different countries and regions, especially in the field of cross-border payments. Traditional cross-border payments often rely on multiple intermediary banks and complex settlement processes, which not only increase transaction time costs but also make payment fees exorbitant. According to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), traditional cross-border payments typically take 2 to 3 business days, with fees usually ranging 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 the status quo through its innovative On-Demand Liquidity (ODL) technology. ODL technology allows users to make instant cross-border payments using XRP as a bridge currency without the need for pre-funding. For example, when a business wants to transfer funds from the United States to Japan, traditional methods require multiple intermediary banks and may take several days to complete the transaction. With XRP, users can complete the payment in seconds at a cost far 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 established a wide payment network globally through collaborations with numerous banks, payment service providers, and financial institutions. This allows XRP to not only play an important role in traditional finance but also achieve breakthroughs in payments and remittances in emerging markets and developing countries, further promoting the development of financial inclusion.
The advantages of Ripple and XRP: a combination of bank cooperation and decentralization.
XRP's success in the global payment system can be attributed to its deep collaboration with traditional banks and financial institutions. Ripple has always adhered to the philosophy of 'collaborating with traditional financial institutions rather than competing with them.' By establishing partnerships with leading financial institutions around the world, XRP has achieved rapid promotion within existing financial infrastructures. For example, Ripple has engaged in strategic partnerships with several large 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 in the financial services sector.
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 be limited to the cross-border payment sector; its application potential in emerging areas such as decentralized finance (DeFi) and asset tokenization is also worth looking forward to. As Ripple continues to strengthen its partnerships with global banks and financial institutions and promotes the deployment of XRP in more financial sectors, XRP is expected to become an indispensable part of the global payment system and evolve 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 efforts have primarily focused on traditional finance. With the rapid development of global financial technology, the transition from traditional finance to the Web3 industry has become the mainstream trend in financial markets, and Ripple has begun to gradually lay out in the Web3 industry. However, unlike many cryptocurrency projects, Ripple has not limited its focus to the purely digital currency domain but has pursued a more ambitious vision to diversify its products and services. Ripple is focusing on decentralized finance (DeFi), stablecoins, and asset tokenization in the Web3 space. 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 XRP's future.
Ripple's robust strategy: compliance-based, expanding Web3 partnerships.
Unlike many cryptocurrency projects that pursue short-term gains and speculative practices, Ripple has consistently adhered to a sound core strategy, committed to promoting innovation within a compliance framework. During its four-year litigation process with the U.S. Securities and Exchange Commission (SEC), Ripple's strategic direction has become increasingly clear, further reinforcing its commitment to stable development. From initially positioning XRP as a cross-border payment tool to now actively laying out Web3, Ripple has always remained compliant and closely collaborated with traditional financial institutions. This strategy has not only enhanced market trust in Ripple but has also made its layout in the Web3 field 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 a virtual asset service provider (VASP) registration from the Central Bank of Ireland, ensuring its legal operations in multiple countries and regions. These qualifications provide Ripple with strong compliance support and further enhance its credibility as a global financial service provider.
Ripple's global network partnerships also provide 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 partnerships not only enhance Ripple's influence in traditional finance but also provide more practical application scenarios for the use of XRP. Additionally, Ripple collaborates with platforms like Archax to actively promote the tokenization of real-world assets (RWA), helping traditional financial assets smoothly enter the blockchain ecosystem. At the same time, Ripple is also laying out in the 'institutional DeFi' sector, creating new opportunities for further cooperation with financial institutions by investing in projects like tokenized national debt with platforms like OpenEden. Recently, the XRP ETF proposals submitted by companies like Bitwise Asset Management have sparked widespread market attention regarding 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 space, 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 smart contract applications. These characteristics make XRP's role in Web3 distinctly different from its role as a bridge currency in cross-border payments. Despite XRP's technological advantages and efficient transaction mechanisms still being commendable, its biggest challenge in the Web3 ecosystem is how to closely align with the needs 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 various initiatives, gradually penetrating into other key technology areas of the Web3 industry. According to BlockBeats news, on November 30, FOX Business cited insiders reporting that the New York Department of Financial Services has indicated it will approve Ripple's launch of a new stablecoin product—RLUSD, which is planned for official launch on December 4. In the future, the RLUSD stablecoin will serve as a complementary tool to XRP, enhancing its role in Ripple's payment solutions. This strategy not only helps consolidate XRP's market position in the payment sector but also opens up new opportunities for its application in Web3. Additionally, Ripple actively promotes the construction of the XRPL ecosystem by funding developers and supporting innovative applications in the global Web3 field. Through these initiatives, Ripple is actively advancing the development of Web3 technology based on XRP, providing innovative solutions for emerging fields like decentralized finance (DeFi).
What does the future hold for XRP?
After Trump's election, the cryptocurrency industry holds an optimistic view of future regulatory policies, which brings new opportunities for the traditional financial industry that has long sought to enter the crypto market. As Ripple has long been entrenched in traditional finance, due to its potential and influence in cross-border payments, it has attracted considerable investor attention. XRP's recent price trends also reflect this trend, with XRP recently breaking through a dynamic resistance level that has held for five years. Some optimistic crypto analysts believe that XRP's next target price may reach $4.20, and with market sentiment and policy benefits, XRP is likely to break through the historical high of $3.317 set in 2018 in the short term.
However, XRP's future prospects still face considerable controversy. On one hand, the new chair of the U.S. Securities and Exchange Commission (SEC) has not yet been determined, which presents Ripple with a 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 are few signs that XRP's actual usage frequency in global financial services has reached the anticipated targets. Furthermore, Ripple has not publicly disclosed the profitability of its cross-border payment business, relying more on the sale of XRP tokens to sustain operations, leading to substantial benefits for its founding team and shareholders. It is noteworthy that the vast majority of XRP tokens remain held by Ripple, and Ripple sells a certain amount of XRP each quarter.
Moreover, XRP's past performance has failed to significantly change the public's perception of its potential in the Web3 space, which has led 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 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 worth looking forward to.
