New Trump Proposal Could Make XRP, Bitcoin, and More Tax-Free

XRP/USD trades near $2.13–2.14 as the market continues to digest a sharp post-SEC rally. After a 500% surge in late 2024 and early 2025, the token remains about 400% above its pre-election base but is still below its July 2025 peak of $3.65. The recent volatility reflects a mix of macro sentiment, ETF inflows, and whale activity, with speculative flows dominating over fundamental demand from Ripple's payment network.

Ripple's payment network has connected over 300 banks across 45 countries but most still rely on off-chain settlement methods rather than direct XRP-USD usage. The company is pushing a stablecoin, RLUSD, to better align with institutional risk appetites. While the network effect is real, structural demand from settlement activity remains modest, making XRP more sensitive to macro shifts and speculative trends.

The launch of spot XRP ETFs in November 2025 has significantly changed the investment landscape. These products have attracted $1.37 billion in assets and $1.18 billion in net inflows, providing institutional access without direct wallet or exchange exposure. At the same time, XRP balances on exchanges have dropped by more than half to about 1.6 billion tokens, reinforcing a bullish supply setup. However, ETF flows have shown cyclicality, with recent outflows of $40 million signaling caution in volatile conditions.

Why Did This Happen?

President Trump's proposal to remove taxes on crypto transactions could reshape the digital asset landscape, particularly for XRP and Bitcoin. If passed into law, this initiative would remove the friction of tracking and reporting small crypto transactions, making everyday usage more practical. The removal of tax obligations could incentivize broader adoption of XRP for daily payments and cross-border transactions, given its fast and low-cost settlement capabilities.

Currently, users face complexity in tracking every small transaction for tax reporting. Removing this burden would allow XRP to be used more frequently for everyday purchases and transfers, especially in sectors like remittances and e-commerce. The policy shift aligns with Ripple's vision of using XRP as a bridge asset, particularly in a U.S. regulatory environment that is increasingly favorable to digital assets.

How Did Markets React?

The U.S. could position itself as a global leader in crypto if the tax-free environment is implemented. This follows similar moves by countries like Dubai, Singapore, and Hong Kong, which have already introduced favorable crypto policies. By creating a more business-friendly ecosystem, the U.S. could attract investment and innovation in blockchain technologies, potentially boosting Ripple's adoption.

Ripple has already taken steps to expand its presence in the UK, securing regulatory approvals from the FCA to offer cross-border payment services. These approvals include an Electronic Money Institution licence and Cryptoasset Registration, enabling Ripple to serve UK-based institutions more efficiently. The UK has become a strategic hub for Ripple, with the company investing in local infrastructure and supporting blockchain research at universities.

What Are Analysts Watching Next?

Analysts predict XRP hitting $3 in 2026, driven by increasing institutional adoption and a growing ecosystem on the XRP Ledger. The launch of the Ethereum Virtual Machine (EVM) sidechain in mid-2025 has lowered barriers for developers, but traction is still low, with less than $50,000 in total value locked as of early 2026. If usage increases and more capital flows into the ecosystem, XRP could see gradual upward pressure.

Ripple's institutional strategy, including recent acquisitions and its pursuit of a U.S. national bank charter, could also contribute to XRP's growth. The company aims to position itself as a key player in traditional finance, offering custody, prime brokerage, and stablecoin services to banks and financial institutions. If successful, this could drive more on-chain settlement demand for XRP and RLUSD.

Meanwhile, the UK's regulatory environment is evolving, with new rules expected to treat crypto like traditional asset classes by 2027. This aligns with broader transatlantic efforts to create a cohesive regulatory framework for digital assets, involving collaboration between the U.S. and UK governments. The outcome could shape XRP's adoption and market access in both regions.

XRP's price is currently supported by a combination of ETF inflows, compressed supply on exchanges, and whale activity. However, macro conditions and regulatory shifts remain key risks. If rate expectations are delayed or risk sentiment deteriorates, XRP could see a more pronounced decline due to its high beta profile. Analysts are closely watching ETF flows, institutional allocations, and real-world adoption to determine whether the $3 level is a realistic target for 2026.