XRP's Struggle for Utility: Can Institutional Adoption Translate into Real-World Usage?

In 2025, XRP finds itself at a crossroads. On one hand, institutional adoption has surged, with ETF inflows exceeding $1.2 billion and tokenization projects like abrdn's $3.8 billion money market fund anchoring XRP in regulated capital markets. On the other, real-world usage metrics-such as transaction volume and cross-border payment adoption-remain underwhelming relative to the asset's institutional profile. This tension between infrastructure development and token utility raises a critical question: Can XRP's institutional momentum translate into meaningful real-world adoption, or is the asset trapped in a self-reinforcing cycle of speculation and regulatory optimism?

Institutional Adoption: A House Built on Infrastructure

XRP's institutional appeal in 2025 is rooted in its infrastructure-first strategy. Ripple's XRP Ledger (XRPL) has positioned itself as a low-cost, high-speed solution for cross-border payments, with over 300 banking partners, including MoneyGram and SBI Remit, leveraging its network to cut costs and counterparty risks. The launch of the Canary XRP ETF (XRPC) on Nasdaq and the U.S. government's contemplation of a digital asset reserve further cemented XRP's institutional credibility.

Regulatory clarity also played a pivotal role. The August 2025 settlement of Ripple's SEC lawsuit, while not a full victory, provided enough certainty to spur a 11% price spike and $1 billion in ETF inflows. Meanwhile, Ripple's acquisition of Hidden Road (rebranded as Ripple Prime) expanded institutional infrastructure, integrating XRP into clearing, financing, and OTC trading desks. These moves underscore a broader trend: institutions are not merely buying XRP but embedding it into operational workflows, from stablecoin settlements to real-world asset (RWA) tokenization.

Real-World Usage: A Tale of Two Metrics

Despite these strides, XRP's real-world utility remains uneven. While Ripple's On-Demand Liquidity service has processed $95 billion in cross-border payments, this figure pales compared to the $1.2 trillion in global remittances annually. The XRP Ledger's 4 billion transactions since inception highlight its efficiency, but settlement times of four to five seconds and near-zero fees are only compelling if paired with widespread adoption-a gap that persists.

Tokenization efforts, such as abrdn's money market fund, demonstrate XRP's potential to tokenize traditional assets, yet these projects remain niche. Similarly, XRP Tundra-a dual-chain revenue engine introducing staking and governance adds yield-bearing capabilities but lacks the network effects to drive mass adoption. The disconnect is stark: institutions are building infrastructure around XRP, but end-users and smaller financial players are not yet flocking to the network.

The Infrastructure vs. Token Adoption Mismatch

The core challenge for XRP lies in aligning institutional infrastructure with token adoption. Institutions are drawn to XRP's technical merits-low fees, fast settlement, and regulatory compliance-but these benefits only materialize if the token is actively used, not just held. For example, while XRP CME futures hit $1 billion in open interest by August 2025, this reflects speculative demand rather than utility-driven adoption.

This mismatch is exacerbated by market dynamics. XRP's price fell 13% in 2025 despite $1 billion in ETF inflows, suggesting that institutional buying has not yet translated into broader market confidence. Meanwhile, retail sentiment remains tepid, with many viewing XRP as a "regulatory lottery ticket" rather than a utility asset.

Can the Gap Be Bridged?

The answer hinges on whether Ripple and its partners can scale real-world use cases. Regulatory tailwinds, such as Singapore and Abu Dhabi's approvals for ODL, open new markets for XRP's cross-border payments. Additionally, XRP Tundra's revenue-backed yield model could attract yield-seeking institutions, provided it demonstrates consistent returns. However, these initiatives must overcome skepticism about XRP's role in a post-SEC landscape and compete with alternatives like Stellar (XLM) and Solana (SOL), which offer similar infrastructure with stronger developer ecosystems.

Conclusion: A Work in Progress

XRP's 2025 trajectory illustrates the complexities of building a utility-driven crypto asset. Institutional adoption has laid a robust foundation, but real-world usage remains the missing piece. For XRP to achieve its vision, Ripple must prove that its infrastructure can scale beyond pilot projects and regulatory milestones. Until then, the asset will likely remain a hybrid of speculative bet and infrastructure experiment-a duality that defines its struggle for true utility.