XRP News Today: Ripple CTO Attributes Low XRP Ledger Activity to Compliance and Liquidity Concerns

Ripple’s Chief Technology Officer, David Schwartz, has addressed persistent questions regarding the limited on-chain volume for XRP despite the company’s extensive bank partnerships. While Ripple has reportedly secured over 300 partnerships since its founding in 2012, the XRP Ledger (XRPL) has not seen the anticipated levels of transaction activity. As of mid-2025, total value locked in XRPL-based decentralized finance stood at $80.6 million, significantly lower than major platforms such as Ethereum and Solana [1].

Schwartz explained that many financial institutions continue to prefer off-chain settlements primarily for compliance reasons rather than due to capacity constraints of the XRP Ledger. He emphasized that the inability to guarantee the legitimacy of liquidity providers—such as whether they are sanctioned actors—prevents full decentralization in enterprise payments. To address these issues, Ripple is developing permissioned domains that would allow only vetted counterparties to transact on-chain [1].

The CTO also highlighted the role of XRP as a bridge currency. He noted that for XRP to function effectively, users must hold the token for availability, particularly in multi-currency scenarios where timing is critical. This is in line with Ripple’s broader vision of leveraging XRP to facilitate cross-border payments and tokenization efforts [1].

When asked why firms like BlackRock might choose XRPL over building proprietary blockchains, Schwartz pointed to the importance of interoperability and asset portability across chains. He cited Circle’s deployment of USDC across multiple networks as an example of how flexibility can drive adoption. He also predicted that future institutional blockchain use will not be dominated by a single chain but rather by shared standards across different networks [1].

Despite a reported 30–40% drop in XRPL activity in Q1 2025, Schwartz remains optimistic. He suggested that the decline mirrors broader crypto seasonality and that the trend is beginning to reverse, with institutions moving closer to on-chain operations. He also warned that in a future dominated by stablecoins, XRP could retain its value as a neutral intermediary. Schwartz argued that no single stablecoin can achieve global dominance due to legal and jurisdictional boundaries, and a multi-stablecoin environment benefits from a currency like XRP to facilitate cross-token settlements [1].

Schwartz clarified that while Ripple is a U.S.-based company, the XRP Ledger does not discriminate among participants and is not under U.S. control. He acknowledged that some regions may be hesitant to adopt a U.S.-affiliated network, but emphasized that Ripple is focused on building trust and adoption in markets that welcome its services [1].

Source: [1] Ripple CTO Explains Why Bank Partnerships Haven’t Generated Billions in On-Chain Volume for XRP (https://zycrypto.com/ripple-cto-explains-why-bank-partnerships-havent-generated-billions-in-on-chain-volume-for-xrp/)