XRP vs Bitcoin: Ripple’s Payments Network Aims at Banks

Analysts weigh XRP’s fast, low-cost cross-border transfers against Bitcoin’s store-of-value role, as ODL and RLUSD shape bank adoption.

Rich by Coin

2026-01-18

XRP is a more efficient payment method than Bitcoin, offering fast transactions and sub-$0.01 fees. It’s designed as a cross-border payments solution for financial institutions, but it hasn’t been widely adopted. While Bitcoin is the more proven investment, XRP also has potential if it can increase usage with issuer Ripple’s banking partners. Bitcoin and XRP are both decentralized digital currencies that use blockchain technology to record transactions.

Bitcoin was the first, and its anonymous founder launched it in 2009 as a digital currency for online payments, with no reliance on a central banking system. XRP has a much different origin story. Ripple, a private company, launched XRP in 2012. Where Bitcoin’s purpose was to eliminate the need for financial institutions, Ripple designed XRP to work with financial institutions, making cross-border payments faster and cheaper.

Transactions typically process in three to five seconds and cost well under $0.01. Bitcoin transactions, on the other hand, normally take about 10 minutes, and the current average fee is just over $0.80. A fairly low maximum supply of 21 million BTC helps with that by providing built-in scarcity. XRP exists in more of a middle ground between investment and payment method.

The value of XRP is tied to its issuer. Ripple Payments includes an On-Demand Liquidity (ODL) feature that incorporates XRP. Banks have traditionally maintained pre-funded accounts with foreign currencies. If a bank uses ODL with Ripple Payments, it can instead convert its local currency to XRP to transfer funds.

The recipient can then convert XRP into its own currency. As financial institutions adopt XRP for ODL, demand will likely grow, and the price should increase. Ripple also launched a stablecoin, Ripple USD (RLUSD), in December 2024. Stablecoins aim to maintain the same value as another asset — in Ripple USD’s case, the U.S. dollar.

This could potentially reduce demand for XRP if banks prefer a stable asset for ODL instead of XRP, which is highly volatile. XRP has had several growth catalysts since late 2024. It surged after the election of Donald Trump as president, and issuer Ripple’s five-year lawsuit with the Securities and Exchange Commission (SEC) came to an end in August 2025.

The SEC would go on to approve the first spot XRP ETFs in November 2025. But for XRP to take the next step, usage by financial institutions will need to increase.