XRP News Today: XRP Ledger's Security Flaws Spark Concern Amid Growing Adoption

XRP Ledger continues to face scrutiny regarding its security and operational resilience, according to a recent assessment by blockchain research firm Kaiko. In its latest Blockchain Ecosystem Ranking, the XRP Ledger scored the lowest for security among 15 blockchains analyzed, receiving a score of 41 out of 100. This places it below Polygon and Stellar, with Ethereum securing the highest score in the category at 83. Kaiko evaluates networks based on governance, integration, liquidity, operational efficiency, and security, with the latter encompassing validator decentralization, audit frequency, and past incidents. The firm noted that the XRP Ledger's low score was attributed to a supply-chain hack in April, a poor Nakamoto coefficient, and a limited number of validators. The Nakamoto coefficient measures how many entities would need to collude to compromise the network, highlighting a concern for proof-of-stake chains like XRP Ledger. The April breach involved an official software package used by developers, which was compromised to inject malicious code capable of stealing users' private keys. While the core ledger and GitHub repository were unaffected, the incident raised alarms about supply-chain security and user protection [1].

The XRP Ledger operates with approximately 190 active validators, but only 35 are included in the default unique node list used by most participants to reach consensus. This design, intended to optimize speed and reliability, has drawn criticism for limiting validator diversity and increasing the risk of coordinated disruption. Unlike Ethereum and Solana, which rely on large, open validator sets—over 1 million and 1,700, respectively—the XRP Ledger's limited validator distribution is reflected in its low Nakamoto coefficient score. Ripple’s CTO, David Schwartz, did not respond to requests for comment regarding the findings [1]. The XRP Ledger, developed by Ripple, underpins several of the company’s services and remains a focal point for cross-border payment innovations. Despite security concerns, XRP continues to be adopted by financial institutions seeking faster and more cost-effective international payment solutions.

Several major banks, including Santander, PNC Bank, and Standard Chartered, have integrated XRP and RippleNet technology to streamline cross-border transactions. These institutions leverage XRP’s ability to facilitate near-instant money transfers at a fraction of the cost of traditional methods. Santander’s One Pay FX, for instance, allows customers to send money internationally with faster processing and transparent fees. Similarly, PNC Bank became the first major U.S. bank to adopt Ripple’s technology for commercial clients, enabling real-time international payments that enhance cash flow management for businesses. These developments underscore the growing interest among traditional banks in blockchain-based solutions to stay competitive against emerging fintech platforms [3].

In Asia, SBI Holdings and its subsidiaries, SBI Remit and SBI Ripple Asia, have pioneered the use of XRP for real-world remittances and cross-border payments. SBI Remit employs XRP to expedite remittances from Japan to other Asian countries, drastically reducing transfer times from days to seconds. SBI Ripple Asia is focused on expanding Ripple technology across the Asian banking sector, forging partnerships to drive XRP adoption for international transactions. Meanwhile, MUFG, one of Japan’s largest financial conglomerates, joined RippleNet to improve the efficiency of its overseas payment services, particularly for instant remittances between Japan and the U.S. and Thailand [3].

In Latin America, companies like BeeTech and Bitso are leveraging XRP and RippleNet to transform remittance services. BeeTech, a Brazilian payments company, uses RippleNet to offer faster and more affordable cross-border transactions, addressing the needs of a region with high immigration levels and a demand for low-cost, fast money transfers. Bitso, a leading cryptocurrency exchange in Mexico, has also integrated XRP to enable real-time fund transfers between the U.S. and Latin America. These efforts have contributed to a surge in cross-border transaction volumes, demonstrating the potential of blockchain to support financial inclusion in traditionally underserved markets [3].

Regulatory challenges remain a key consideration for banks adopting XRP-based solutions. Financial institutions must navigate evolving legal frameworks and ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements. Ripple collaborates with banks to meet global regulatory standards, including those set by international payment bodies. Despite these hurdles, the efficiency and cost benefits of XRP continue to attract attention from financial institutions worldwide [3].

Source:

[1] XRP Ledger Sinks to Last Place in Blockchain Security Review (https://www.dlnews.com/articles/defi/xrp-ledger-sinks-to-last-place-in-blockchain-security-review/)

[2] US OCC Terminates 2022 Order Targeting Anchorage (https://cointelegraph.com/news/occ-consent-order-anchorage-digital-aml)

[3] Banks Using XRP: Transforming Cross-Border Payments (https://coinpaper.com/10652/banks-using-xrp-transforming-cross-border-payments)