Author: Daniel Li, CoinVoice
Recently, the cryptocurrency market has welcomed multiple favorable developments, and as an established public chain, Ripple (XRP) has become the focus of the market. The news of U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler's imminent departure has ignited market expectations for a more friendly regulatory environment. Meanwhile, Ripple's prolonged legal dispute with 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 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 from financial institutions for its efficiency, low cost, and technological innovation. However, the growth journey 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 is boosted, XRP seems to be seizing this historic opportunity to redefine its future market positioning. Can XRP, as a veteran in the cryptocurrency field, once again open up new innovative pathways and lead the future of blockchain payments? Let's explore.
01. Regulatory Favorable SEC Revenge Concept Coin XRP Hits Three-Year High
The 2024 U.S. presidential election has been settled, with Republican candidate Donald Trump 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, which undoubtedly brought significant confidence to the market and pushed up the prices of several cryptocurrencies, including XRP. In this wave of market recovery, XRP, dubbed the 'revenge concept coin', has experienced a turnaround, reaching a three-year high 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 regulatory environment changes and key progress in Ripple's four-year arduous litigation with the U.S. Securities and Exchange Commission (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 on XRP. The SEC accused Ripple of issuing XRP since 2013, raising $1.3 billion, and deemed its actions a violation of 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, as the legal disputes begin to wind down in 2024, XRP has welcomed a long-awaited turnaround. In 2023 and 2024, New York Federal Judge Analisa Torres made rulings that brought significant breakthroughs for Ripple. She ruled that Ripple's sales of XRP to retail investors did not violate securities laws, while sales to institutional investors were deemed illegal, requiring Ripple to pay a $125 million fine. This ruling is significantly lower than the $2 billion fine initially sought by the SEC and leaves room for Ripple's future operations. More importantly, this ruling sends a signal to the market regarding XRP's future development and alleviates excessive concerns about regulation.
The new SEC chairman may bring more favorable news for XRP
Another important factor driving XRP's recovery is the news of SEC Chairman 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 once placed many crypto projects in dire straits. However, with Gensler set to leave office in January 2025, market expectations for the new SEC chair have surged. Many anticipate that the new SEC leadership may adopt a more relaxed and friendly attitude towards the crypto industry, bringing hope to XRP and other projects that have suffered regulatory suppression.
(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 adopt a more friendly stance on cryptocurrency regulatory policies. If the new SEC chairman indeed shifts policy as expected, Ripple's lawsuit may reach a settlement or even be dismissed, fundamentally changing the regulatory environment for the entire cryptocurrency industry. This would undoubtedly be a significant policy boon for projects that have been suppressed, such as Ripple, Binance, and Coinbase.
Ripple Changes Litigation Predicament Through Political Action
Ripple's 'Road to Revenge' Doesn't Just Depend on Legal and Regulatory Changes; the Company's Active Investment in Politics Has Also Become a Part of Its Tactics. According to CoinDesk, Ripple Labs has injected $25 million into the Fairshake Political Action Committee (PAC) within the cryptocurrency industry, aiming to influence the 2026 U.S. Congressional elections and promote more favorable cryptocurrency regulatory policies. Ripple's initiative marks the company's beginning to leverage political means, attempting to reverse its litigation predicament with the SEC through policy reform and secure a more favorable legal and regulatory environment for XRP.
In addition, reports from Reuters indicate that multiple cryptocurrency companies, including Ripple, are competing for seats on the cryptocurrency advisory committee that Trump plans to establish. 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 crypto-friendly policy framework promoted by the Trump administration. If Ripple can secure a place in this process, it will be able to gain more support for XRP at the policy level, thus obtaining more freedom in future regulatory environments.
02. XRP: Innovator of Traditional Financial Payment Systems
For decades, the global financial payment system has been dominated by traditional banking settlement 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 to be addressed. High transaction costs, slow payment processing speeds, and the complexities 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 in driving innovation in traditional financial payment systems with its innovative technology 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 solve the pain points of 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, through its innovative Ripple Protocol Consensus Algorithm (RPCA) and decentralized XRP Ledger, greatly increases transaction speed, reduces 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, a technology company dedicated to promoting innovation in the financial system, was founded in 2012 by Chris Larsen and Jed McCaleb. The initial goal of Ripple was to transform the existing financial payment system through blockchain technology, particularly addressing the high costs and inefficiencies within traditional banking settlement systems. Ripple's vision is not only 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 for faster, cheaper, and more efficient payments and transactions.
XRP's Technical Advantages: Efficient, Low-Cost, and High Throughput
One of XRP's greatest advantages is its adoption 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 to ensure the validity of transactions. This design allows the XRP network to complete transaction validation 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.
Compared to Bitcoin's transaction processing speed of only 7 transactions per second, the XRP Ledger can handle up to 1,500 transactions per second, and its throughput is expected to improve further with ongoing technological optimization. This efficient transaction processing capability makes XRP an ideal choice for cross-border payments and fund transfers, especially in scenarios requiring fast settlements and large payments, where XRP demonstrates unparalleled advantages.
XRP's Role in the Global Payment System: Revolutionizing 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 cross-border payments. Traditional cross-border payments often 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 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 commercial activities.
XRP has transformed this situation through its innovative On-Demand Liquidity (ODL) technology. The ODL technology allows users to conduct instant cross-border payments using XRP as a bridge currency without pre-funding. For example, when a company 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. However, by using 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.
Through cooperation with multiple banks, payment service providers, and financial institutions globally, Ripple is gradually establishing a broad payment network. This allows XRP to play an important role not only in the traditional financial sector but also to achieve breakthroughs in payment and remittance in emerging markets and developing countries, further promoting the development of financial inclusivity.
The Advantages of Ripple and XRP: The Combination of Bank Cooperation and Decentralization
XRP's success in the global payment system is inseparable from its deep collaboration with traditional banks and financial institutions. Ripple has always adhered to the philosophy of 'collaborating with traditional financial institutions rather than opposing them', promoting the rapid adoption of XRP within existing financial infrastructures by establishing partnerships with leading financial institutions globally. For example, Ripple has engaged in strategic collaborations with several major banks and payment platforms, such as Bank of America, Credit Suisse, and Mitsubishi UFJ Financial Group, to promote the use 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 the traditional banking system does not mean it has lost its decentralized characteristics. The XRP Ledger is a decentralized public blockchain that anyone can join and become a validating 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 that distinguishes it from traditional financial systems.
In the future, XRP may not be limited to the cross-border payment field; 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 cooperation with global banks and financial institutions and promotes the implementation of XRP in more financial fields, XRP is expected to become an indispensable part of the global payment system, evolving into a new global currency.
03. From Traditional Finance to the 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 financial technology, 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 lay out its plans in the Web3 sector. However, unlike many cryptocurrency projects, Ripple has not limited its vision to the purely digital currency field but has pursued a more grand vision to promote the diversification of its products and services. Ripple focuses on decentralized finance (DeFi), stablecoins, and asset tokenization in the Web3 field. It is worth noting that although XRP itself does not play a direct role in these strategic directions of Ripple, this long-term layout by Ripple gives XRP a broader application prospect for the future.
Ripple's Robust Strategy: Compliance as the Foundation, Expanding Web3 Cooperation
Unlike many cryptocurrency projects that are short-sighted and speculative, Ripple has always adhered to a prudent core strategy, committed to promoting innovation within a compliance 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 robust development. From initially positioning XRP as a cross-border payment tool to actively laying out plans for Web3, Ripple consistently maintains compliance and closely collaborates with traditional financial institutions. This strategy not only enhances market trust in Ripple but also makes its layout in the Web3 field more foresighted 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, the primary payment institution license from the Monetary Authority of Singapore, and the registration as a virtual asset service provider (VASP) with the Central Bank of Ireland, ensuring its legal operation 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 partnerships also provide strong support for its expansion in the Web3 field. The company has established deep collaborations with over 100 banks and financial institutions globally, 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's use. 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 such as tokenized government bonds through partnerships with platforms like OpenEden. Recently, the XRP ETF proposal submitted by companies like Bitwise Asset Management has 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 field, this does not mean that the XRP token can seamlessly adapt to this transformation. Unlike the traditional cross-border payment market, the core values of the Web3 industry lie in decentralization, digital asset liquidity, and smart contract applications, which fundamentally change XRP's role in Web3 compared to its function as a bridge currency in cross-border payments. Despite XRP's technical advantages and efficient transaction mechanisms being commendable, its biggest 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 into other key technology fields of the Web3 industry. According to BlockBeats, on November 30, FOX Business quoted 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—and plans to officially launch it 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. 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 actively driving the development of Web3 technology based on XRP, providing innovative solutions for emerging fields such as decentralized finance (DeFi).
What is the future prospect of XRP?
After Trump's election, the crypto industry holds an optimistic view of future regulatory policies, which brings new opportunities for the traditional financial sector that has long sought to enter the crypto market. As Ripple has long been deeply engaged in the traditional financial sector, its potential and influence in cross-border payments have attracted considerable investor attention. The recent price trends of XRP reflect this trend, with XRP recently breaking through a five-year dynamic resistance level. Some optimistic crypto analysts believe that XRP's next target price could reach $4.20, and with the boost of market sentiment and favorable policies, XRP is expected to break through the historical high of $3.317 set in 2018 in the short term.
However, significant controversies still surround XRP's future prospects. On one hand, the new U.S. Securities and Exchange Commission (SEC) chairman has not yet been confirmed, which creates some regulatory uncertainty for Ripple, and potential compliance risks remain. 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 very few signs indicating that XRP's actual usage frequency in global financial services has met its expected goals. 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, leading to substantial profits for its founding team and shareholders. It is worth noting that the vast majority of XRP tokens are still held by Ripple, and the company sells a certain amount of XRP every quarter.
Moreover, XRP's past performance has not significantly changed the 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 proactive measures to enhance XRP's future development potential. Recently, Ripple launched the RLUSD stablecoin to expand 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 facing challenges, the future of XRP is still worth looking forward to.
