The Long-standing Regulatory Disputes of Ripple Come to an End, What’s Next for XRP?

Ripple Labs CEO Brad Garlinghouse has shown new vigor after the company emerged from the regulatory dispute with the U.S. Securities and Exchange Commission ( SEC ).

Recently, Ripple submitted a federal banking license application to the U.S. Office of the Comptroller of the Currency (OCC), striving to become the second company to receive this honor after Anchorage Digital. At the same time, its New York-regulated custodian service provider, Standard Custody and Trust Company, is also working to become the first cryptocurrency company to obtain a master account with the Federal Reserve, in order to directly hold reserve deposits supporting its $469 million stablecoin RLUSD at the Federal Reserve.

Garlinghouse stated that if the application is approved, Ripple will be subject to both state and federal regulation, which will establish a new and unique trust standard in the stablecoin market.

At the same time, Ripple is continuing to improve the infrastructure of RLUSD. The company announced a partnership with the Swiss AMINA Bank and is collaborating with OpenPayd in London to establish a payment network using stablecoins.

Since November 1st of last year, the native token XRP primarily held by Ripple Labs has risen by 347%. Additionally, XRP may see the first U.S. spot exchange-traded fund (ETF) later this year. Nevertheless, the price of XRP has remained largely stagnant over the past six months.

Despite the many uncertainties surrounding Ripple Labs, XRP Ledger(, and the future of its stablecoins, the biggest suspense still focuses on its original token XRP.

As Ripple seems to shift its focus more towards the stablecoin market, there are opinions that if the scale of RLUSD truly expands, it may eat into the potential demand for XRP that Ripple has been trying to create for years.

This is indeed a new starting point for Ripple, but old issues still remain for this blockchain company. To push the XRP price into the next growth phase, certain key factors may need to change. Here are two major challenges to pay attention to.

![Ripple's years-long legal disputes have ended, where will XRP go from here?])https://img-cdn.gateio.im/webp-social/moments-a80b25ea6cc27cd5250c121ca58bb042.webp(

The actual application of XRP is still limited

As early as March 2024, Forbes published an article titled "The Billion-Dollar Zombie Rise in the Crypto Space." The article focused primarily on the XRP Ledger ) XRPL (.

The article points out that, from the perspective of global capital flows, Ripple Labs is in a lackluster situation, and almost no one believes it can disrupt the Belgium-based banking cooperative known as SWIFT, which processes interbank transfers of up to $5 trillion daily. Despite failing to achieve its core goals, Ripple's blockchain—a ledger that records XRP transactions—continues to operate normally. However, it is essentially of no use, while the market value of the XRP token stands at $36 billion, making it the sixth largest cryptocurrency.

Such a description is clearly quite harsh, but the article points out that although the XRPL had a market cap of 36 billion USD at the time, its fee revenue in 2023 was only 583,000 USD. This is equivalent to a staggering 61,690 times P/S Ratio). More notably, by that time Ripple had been established for 12 years, which is not a newly started startup. These data indicate that XRP is more often seen as a "memecoin"( rather than an asset with practical use.

So, what changes have occurred in the XRPL since then? In 2024, the transaction fee revenue of XRPL increased to $1.15 million, which is an increase of only $567,000 compared to the previous year. Meanwhile, its market capitalization grew by over $80 billion from $33.32 billion at the beginning of 2024, reaching an astonishing price-to-sales ratio of 103,826.

This set of data highlights once again the core issue faced by XRP: despite the continuous increase in market capitalization, its actual applications and economic benefits remain limited, making it difficult to support its high market valuation.

According to the data, the activity on XRPL is not sufficient to support its price increase. The daily trading volume of its flagship decentralized exchange )DEX( is usually below $100,000. In contrast, the market leader PancakeSwap has a daily spot trading volume exceeding $1 billion, not to mention the rapidly growing derivatives DEX sector, where the two major exchanges process trading volumes of up to trillions of dollars every month.

In the field of non-fungible tokens )NFT(, XRPL is also clearly lagging behind. Data shows that in 2024, XRPL has an average of only about 550 NFT traders per day. Even in the current overall sluggish NFT market, Ethereum still has about 5000 active traders daily.

Moreover, the XRPL seems to be struggling with the introduction of native smart contract functionality. As its focus on payments gradually expands, smart contract capabilities have become a "basic configuration" for blockchains. However, as of June 30, Ripple Labs launched an EVM) Ethereum Virtual Machine ( compatible sidechain in collaboration with Axelar, attempting to address this shortcoming. XRP will serve as the Gas token and native asset for this new chain, creating potential demand sources for tokens beyond payment functionalities.

Nonetheless, Ripple still needs to make significant efforts to create real, non-speculative user demand for XRP through this new direction.

![What will happen to XRP now that Ripple's long-standing legal disputes have ended?])https://img-cdn.gateio.im/webp-social/moments-bbc63c4fbc8f89e556fac42df00cc2a4.webp(

The Impact of RLUSD

In addition, XRP holders also need to consider how the stablecoin RLUSD launched by Ripple Labs will affect the demand for XRP. After all, the original design goal of XRP was to serve as a bridge currency, helping banks complete currency conversions at lower costs and with higher efficiency. However, there are viewpoints that the launch of stablecoins may directly conflict with this goal, especially in the context of RLUSD's promotion potentially further consolidating the dollar's dominance. This not only aligns with the U.S. intention to maintain dollar hegemony but may also extend to countries and regions with insufficient dollar coverage.

According to data, the stablecoin market is growing at a rocket-like speed. Currently, the total supply of stablecoins has reached $254.79 billion, while the entire industry is still digesting the extremely successful IPO of USD Coin's issuer last month. Meanwhile, the U.S. government is gradually approaching the passage of the GENIUS Act ), which will become the first cryptocurrency-related law and set rules for the future development of stablecoins. With a large influx of funds into this field and favorable regulatory pushes, many people are beginning to believe that stablecoins, rather than XRP, are the future of the payments space.

Nonetheless, the possibility of coexistence between the two still exists. After all, unless some emerging markets follow El Salvador and adopt the US dollar as their official currency, the demand for foreign exchange conversion remains. However, some also believe that stablecoins, due to their lower volatility, are more suitable as bridge currencies than XRP.

This view on the demand for two types of tokens has also been echoed by Ripple Labs' Chief Technology Officer David Schwartz. In an interview last spring surrounding the launch of the RLUSD stablecoin, he stated: "Providing customers with multiple paths to improve their experience means you can attract more customers. If we only rely on XRP, then in places where XRP is not available, we can only tell customers 'no.'" However, compared to when Ripple Labs was founded in 2012, the potential market size for XRP may have shrunk.

In addition to the overall rise of stablecoins, another possible reason for Ripple launching RLUSD is the "red letter" shadow cast on XRP due to the enforcement actions by the U.S. Securities and Exchange Commission ( SEC ) against Ripple Labs. Owen Lau, Executive Director of Oppenheimer & Co, stated in an interview in April 2024: "Ripple may feel they have no choice but to issue stablecoins to persuade banks and other financial institutions to cooperate with them. These institutions may be reluctant to hold or use XRP due to its price volatility and the regulatory risks associated with the SEC lawsuit."

However, for RLUSD to achieve breakthrough growth and potentially return value to XRP, Ripple must act quickly. As is well known, the stablecoin market is currently dominated by two industry giants: Tether( with a market cap of $158.3 billion) and Circle( with a market cap of $62 billion). Ripple's best strategy may be to promote the use and value of RLUSD through its new sidechain, such as by incentivizing the adoption of RLUSD, thereby increasing demand for XRP for gas fees. But this remains a hypothesis full of uncertainties.

Currently, the two major stablecoin giants and their tokens have achieved widespread market distribution and are striving to expand their ecological footprint. Tether not only dominates the trading field but has also announced that its tokens can be used to pay gas fees on a new blockchain called Stable. Circle has formed a high-profile partnership with Coinbase to promote the use of USDC on its Base blockchain and has collaborated with Shopify to enable merchants to use USDC for payments.

Despite the attention on stablecoins, this is not a "blue ocean market" for RLUSD.

Ripple's Ace

If Ripple Labs has a trump card, it is that it may be one of the most well-capitalized cryptocurrency companies in the world. According to its Q1 2025 financial report, the company holds 4.56 million XRP in its wallet, worth approximately $1.027 billion. Moreover, the company also has 371 million XRP in custody accounts, worth up to $8.35 billion, and these funds will be gradually unlocked over the next few years.

Although it is impossible for the company to fully recover such a huge amount of funds if it attempts to sell all XRP at once, Ripple is almost unlikely to face the risk of running out of funds.

For XRP holders, this means that Ripple has unlimited resources to drive the demand for its newly launched EVM sidechain, while also being able to support the expansion of partnerships and use cases for RLUSD or XRP through funding.

However, all of this may not matter to XRP holders. After all, despite the limited user growth of the XRPL ledger in recent years, the price of XRP has still "soared against the trend" and has not been greatly affected.