TLDR

XRP struggles with low usage despite banks, volatility still a major hurdle
Ripple’s XRP adoption stalls as banks shy away from on-chain transactions
XRP use lags amid volatility, institutional distrust, and stablecoin rise
Ripple faces uphill battle as XRP fails to gain traction with big banks
XRP’s role questioned as stablecoins and private chains dominate finance

Ripple’s blockchain, despite more than a decade of development and over 300 bank partnerships, continues to see low on-chain activity. Concerns from XRP holders recently gained widespread attention on X, forcing Ripple’s co-founder David Schwartz to respond. He addressed key issues including usage volume, token volatility, and the actual role of XRP in global banking.

XRP Adoption: Volume and Institutional Reluctance Remain Low

XRP Ledger went live in 2012 with a vision to support cross-border payments among trusted institutions. Despite that, actual XRP transaction volume on-chain remains limited, especially when compared to other major digital assets. While Ripple has maintained consistent banking partnerships, many of these institutions avoid using XRP directly.

“Ripple has 300+ bank partnerships, but after 13 years, shouldn’t there be billions in daily on-chain volume?”

I think there are a number of reasons why institutions have historically preferred to use digital assets off chain rather than on chain. I think we’re close to changing…

— David ‘JoelKatz’ Schwartz (@JoelKatz) July 30, 2025

Schwartz explained that banks often prefer to settle transactions off-chain due to regulatory and compliance concerns. Because XRP relies on decentralized validators, financial institutions hesitate to resign control to open networks. Ripple has promised new features, like permissioned domains, to mitigate these concerns and enable compliant usage.

Current financial systems still rely heavily on trusted, centralized models. RippleNet’s messaging layer may see usage, but XRP on-chain volume hasn’t reflected that activity. Schwartz acknowledged the slow pace of institutional onboarding, noting that significant on-chain settlement remains a future goal.

XRP’s Volatility Raises Questions About Its Utility

XRP continues to face criticism over its price volatility, especially as a supposed bridge asset for stable transfers. While Ripple maintains that short transaction times offset this risk, the broader utility of holding XRP remains uncertain. Critics argue that stablecoins or fiat-pegged assets offer simpler, safer transfer options.

David Schwartz claimed that holding XRP can still be beneficial due to potential upside in pricing and utility as a bridge asset. However, that argument draws comparisons to investment vehicles rather than payment infrastructure. Stablecoins like USDC and tokenized dollars are now widely accepted as efficient cross-border tools.

Stablecoins avoid many jurisdictional risks that XRP currently carries. As governments and enterprises adopt local stablecoin solutions, the need for XRP’s bridging role continues to diminish. The market trend leans toward fiat-based digital assets, weakening XRP’s position in future settlements.

Tokenization and Network Trust Hurdles Remain for XRP

Despite Ripple’s efforts in enterprise payment systems, questions persist about the token’s necessity in broader applications like tokenization. Large institutions prefer private blockchain solutions, often bypassing XRP . Schwartz acknowledged this trend but emphasized interoperability as a solution.

Projects like Robinhood use Ethereum-based networks, while others explore building their own chains. These strategies suggest that firms want more control than public chains like XRPL currently offer. While Ripple focuses on partnerships, on-chain activity has yet to reflect meaningful traction.

Foreign governments may also hesitate to use a US-associated token for sensitive financial infrastructure. Ripple operates globally, but XRP’s origins and central management raise concerns for some jurisdictions.

 

The post XRP Adoption Still Lags Despite Ripple’s Big Bank Partnerships: Schwartz appeared first on CoinCentral.

---

Filed under: News - @ July 31, 2025 7:26 pm