The core mission of the XRP project
In one sentence, the core mission of the XRP project is to leverage blockchain technology to enhance the efficiency of the global financial system, especially in the field of cross-border payments. It is more like an 'improver' dedicated to serving existing financial institutions, rather than a 'revolutionary' like Bitcoin that aims to disrupt traditional finance.
A simple explanation of the core content
Core mission: Achieve a 'value internet' that allows money to flow freely, quickly, and at low cost on the global internet, just like information.
Development goal: Provide cross-border payment solutions for financial institutions to become the 'highway' for cross-border transfers between banks and payment institutions, addressing the current issues of slow speed and high costs.
Claimed pain points solved: The inefficiency of traditional cross-border payments has become the 'highway' for banks and payment institutions to carry out cross-border transfers, addressing current slow speed and high costs.
Technical means: XRP Ledger (XRPL) blockchain + XRP token through a proven, fast blockchain network and its native token XRP as a medium for achieving rapid settlement.
Stablecoins and XRP
Due to the rapid development of stablecoins, many people might wonder, since there are simpler stablecoin schemes for cross-border payments, why is XRP still needed?
'XRP as a foundational settlement bridge, stablecoins as terminal payment tools.'
You can think of it as a modern logistics system:
XRP (foundational settlement bridge) is like a giant cargo ship or freight train running between major hub cities. Its task is to efficiently, cost-effectively, and in bulk transport standardized containers across oceans.
Stablecoins (terminal payment tools) are like box trucks, tricycles, or even couriers that deliver goods locally after reaching the destination port. Their task is to flexibly deliver goods (value) directly to the end user.
This process shows that XRP efficiently completes cross-border 'value transfer' in the background like high-voltage transmission. Stablecoins (USDC) serve as the endpoint, becoming the 'digital cash' that Company B is willing to hold and use directly.
Detailed comparison of the two paths
1. Traditional and stablecoin path: Establish a 'vault' at the 'destination'
When institutions use USDT for cross-border settlements, it essentially means: Institution A exchanges its local currency (such as USD) for an equivalent amount of USDT. Institution B receives USDT on the other end and then exchanges it for the local currency (such as Euros).
The key bottleneck here is that Institution B needs to be able to quickly exchange the large USDT it receives for Euros at any time. This requires significant liquidity in the Euro market (i.e., many people willing to buy USDT with Euros), or the issuer of USDT (such as Tether) must have sufficient Euro reserves in that location to support redemptions. For countries and regions with underdeveloped currencies or strict foreign exchange controls, establishing such deep liquidity is very challenging and expensive.
A simple analogy: The stablecoin scheme is like building countless 'digital vaults' around the world with USD as the reserve. You can easily deposit and withdraw 'digital dollars', but if you want to exchange these 'digital dollars' on a large scale for a rare currency, you may find the exchange windows very limited, or the exchange rate is unfavorable.
2. XRP path: Establish a 'highway for assets'
Ripple's more grand vision is to use XRP as a bridge asset. Its core product is 'on-demand liquidity.'
The process is: Institution A instantly exchanges its local currency (such as USD) for XRP, then sends XRP to the country where Institution B is located, and Institution B instantly exchanges XRP for the local currency (such as Mexican Pesos).
The role of XRP: In the entire process, XRP is merely a medium for transfer, it does not serve the function of value storage, only the function of transferring value for a few seconds. Funds are local fiat currencies when sent and received.
The advantage of this scheme is that it does not require a large amount of USD or USDT to be pre-stocked in Mexico as liquidity. It only needs sufficient market depth at both ends of the transaction (USD/XRP and Peso/XRP) to complete instantaneous trades. XRP becomes a shared, neutral bridge asset that can connect any two currencies, theoretically reducing the total cost of establishing deep liquidity for each currency pair.
A simple analogy: The XRP scheme is like building a 'highway' connecting all countries, with XRP being the 'uniformly standardized container' traveling on this highway. When you send a box of 'USD goods' from the U.S., once it gets on the highway, it is automatically and quickly switched to a box of 'Mexican Peso goods' for delivery to the destination. You do not need to worry about whether there is a large 'USD warehouse' at the destination.
💡 Why is this division of labor efficient?
This architecture combines the best characteristics of both technologies, avoiding their respective weaknesses:
Solving XRP's 'terminal liquidity' and 'volatility' issues: There is no longer a need to establish deep trading pairs with XRP for every currency in the world. It only requires maintaining deep XRP/fiat liquidity in major financial centers (such as the USD region, Eurozone). The end users receive stable USDC and do not have to worry about XRP's price fluctuations outside the few seconds of settlement.
Solving the 'cross-chain efficiency' and 'fragmentation' issues of stablecoins: Directly transferring large amounts of USDT/USDC on the blockchain may be slow and costly (especially during network congestion), and there is a risk of multi-chain chaos. Settling with XRP is equivalent to bridging different regions' issued stablecoins using a payment-optimized network. It provides a unified and efficient clearing layer for stablecoins issued by different institutions (such as USDC, USDT, EURC).
🚧 Controversies and Challenges
It is worth noting that XRP is polarizing within the crypto community, primarily facing the following controversies:
Centralization issues: Unlike Bitcoin's complete decentralization, Ripple controls a large amount of XRP tokens and has a strong influence on network development, which has left many crypto enthusiasts pursuing the ideal of 'decentralization' dissatisfied.
Single application scenario: XRP mainly focuses on payments, especially B-end (business-end) cross-border payments. Compared to blockchain platforms like Ethereum that support rich ecosystems such as DeFi and NFTs, its direct appeal and application scenarios for ordinary users are relatively limited.
Summary and Reminder
The current situation of the XRP project is as follows:
Direct revenue is still limited: Although cross-border payment business is growing rapidly, the direct revenue generated is still relatively small compared to the huge market value of XRP and its goal of 'transforming global payments'.
Revenue structure is optimizing: Ripple is working to shift from 'relying on selling tokens' to a diversified revenue model of 'technology services + stablecoins + ecosystem', which is a positive signal.
Ecosystem revenue is in its infancy: Applications like DeFi based on XRPL are beginning to provide opportunities for ordinary holders to earn revenue, but the overall prosperity and revenue-generating ability of the ecosystem still require time to cultivate.
At the same time, XRP seems to be at a positive turning point in 2025, with regulatory obstacles being cleared and institutional interest increasing. Its unique technological efficiency and efforts in compliance give it certain potential in the financial infrastructure sector.
However, its success is not guaranteed; it still needs to face fierce market competition and convert market optimism into tangible large-scale commercial applications.
Therefore, it is appropriate to view XRP as a project in the investment and construction phase. Its value is more contingent on the expectation that its technology and business model will be widely adopted in the future, rather than on current substantial profits.$XRP $BTC
