XRP is the native digital currency supported by XRP Ledger, the underlying peer-to-peer (P2P) payment network that allows for near instantaneous transactions across the world. Together, XRP and XRP Ledger were designed to address liquidity challenges faced by financial institutions using traditional payment channels (i.e., SWIFT, ACH, FedWire system). By providing the means for fast, secure, and low-cost conversions between varying units of value (e.g., commodities, fiat currencies, and other digital assets), the network has the potential to capture significant value from a global payments market worth an estimated $2 trillion USD.1 It was first conceptualized in 2004 by Ryan Fugger, and after several iterations, the Ripple network was formally launched in August 2013, led by the founders2 of the private company known today as Ripple.

By design, XRP is unlike many of its digital currency counterparts. Instead of a supporting blockchain protocol, it uses the XRP Ledger to validate transactions by requiring network participants to reach consensus. In addition, the development and maintenance of the technology is partially overseen by Ripple, which is funded through their own reserves of XRP and by private investments from influential investors, including Andressen Horowitz, Google Ventures, Digital Currency Group and Pantera Capital.3 XRP Ledger technology is also integrated with a unique subset of products and services (e.g., RippleNet, On-Demand Liquidity) targeted specifically for financial institutions. These factors have propelled XRP’s increasing adoption as a global payment rail and helped to establish XRP as the third largest digital asset in the ecosystem by market cap.4

Learn more about the history and defining characteristics of XRP in our report, which is part of the Building Blocks series:

1. Kate Rooney. “Ripple wants a piece of the global payment system while it fights a cryptocurrency ‘holy war.’” CNBC. January 8, 2019. https://www.cnbc.com/2019/01/07/ripple-wants-a-piece-of-the-global-payment-system.html.
2. The Ripple co-founders are Jed McCaleb, Chris Larsen, David Schwartz, and Arthur Britto.
3. Digital Currency Group, Inc., the sole member and parent company of Grayscale Investments, LLC, owns a minority interest in Ripple, which retains a central role in stewarding the development of the XRP Ledger.
4. As of October 31, 2019.