Ripple's 2025 Impact Report reveals that XRP's actual role in the company's operations is narrower than most investors expect, despite the company's significant charity work. According to the report, Ripple donated over $70 million in 2025 alone, bringing total giving since 2018 to over $250 million. However, XRP serves primarily as the asset Ripple gives away rather than the asset the network runs on, with the company's own stablecoin RLUSD doing the actual moving of money in critical situations. This distinction becomes particularly relevant when examining Ripple's real-world applications, where XRP's volatility makes it unsuitable for disaster relief and aid distribution, while the stablecoin provides the steady value characteristics needed for reliable financial transfers. The latest developments show this pattern continuing, with RLUSD increasingly being used as the cash leg in major institutional settlements rather than XRP, creating a fundamental challenge for XRP's utility proposition.
For the first time, RLUSD has surpassed Ethereum on the XRP Ledger, with the XRP Ledger now holding approximately $801 million versus Ethereum's $795 million. This represents a significant strategic shift after 18 months of RLUSD living primarily on Ethereum, the rival chain Ripple has spent a decade competing against. According to recent reports, over the past month, Ripple burned roughly $539 million of RLUSD across both chains, with about three-quarters coming off Ethereum. The migration was largely engineered rather than driven by outside demand, as Ripple deliberately moved its stablecoin to its own chain to capitalize on institutional settlement activity. This flip changes where RLUSD's movement can benefit XRP through the built-in bridging mechanism, unlike on Ethereum where RLUSD remained isolated from XRP's ecosystem. The latest developments show this trend accelerating, with RLUSD crossing $1 billion in market value quickly and becoming the settlement asset enterprises actually want, raising concerns about whether it is taking the role XRP was built to play.
Ripple is methodically transforming itself into a regulated financial institution through strategic acquisitions and regulatory approvals. The company has secured conditional federal approval to operate a national trust bank from the Office of the Comptroller of the Currency, applied for a Federal Reserve master account that would provide direct access to central bank payment rails, and acquired prime brokerage, payments, and corporate treasury services firms. According to reports, this comprehensive banking build includes 70+ regulatory licenses across jurisdictions and a fresh European license allowing service passporting across 30 countries, positioning Ripple to serve as the institutional infrastructure layer for crypto-native finance.
The most concerning pattern emerging is that every Ripple institutional win now runs on RLUSD rather than XRP, fundamentally challenging the core XRP thesis. Recent major developments include Ripple's five-second tokenized Treasury settlement with JPMorgan and Mastercard where RLUSD served as the cash leg despite XRP being the native asset on the XRP Ledger. Similarly, a partnership expanding stablecoin settlement across Latin America uses a regulated peso-backed stablecoin issued on the XRP Ledger integrated with Ripple's infrastructure, while a major remittance deal reaching 170 million people utilizes RLUSD as the primary settlement asset. This consistent pattern raises legitimate concerns about whether XRP's value will accrue from network usage and catalysts like the CLARITY Act and ETF flows, or whether RLUSD will capture the settlement demand XRP was meant to capture. The bull case depends on Ripple choosing to route regulated settlement through XRP as a neutral bridge asset, a choice the company has not yet demonstrated, with RLUSD maintaining its natural advantage for settlement due to its steady value characteristics compared to XRP's volatility.
The most significant revelation is that Ripple has more than 300 institutional partners, but only about 40% use On-Demand Liquidity (ODL), the XRP-based product, while 60% use Ripple's messaging and payment software that does not touch XRP at all. Even among ODL users, banks rarely hold XRP themselves - licensed exchanges and market makers handle the buying and selling, with banks seeing only fiat in and out. This structural gap explains why XRP's price has stayed near a dollar despite Ripple's corporate success, as network adoption does not automatically translate into sustained token demand. The value-accrual problem is that even when banks use ODL, they only hold XRP momentarily through intermediaries before converting it back to fiat, creating fleeting demand rather than sustained accumulation. The bull case acknowledges this reality but emphasizes that ODL volume is real where it runs and that ETF flows and regulatory clarity can drive XRP demand independently of settlement usage.
For XRP holders evaluating the banking transformation's impact, three key signals warrant monitoring. According to reports, the Federal Reserve master account decision represents the most consequential pending item, with approval expanding surface area for XRP usage or stalling the institutional thesis if denied. The second and most important signal is whether XRP appears in Ripple's institutional settlement flows rather than the stablecoin carrying all settlement volume. Third, federal legislation codifying XRP's commodity status would compound the legitimacy benefits provided by the banking build. The bull case depends on Ripple choosing to route regulated settlement through XRP as a neutral bridge asset, a choice the company has not yet demonstrated, with the stablecoin maintaining its natural advantage for settlement due to its steady value characteristics compared to XRP's volatility. The report's findings suggest that XRP's actual role in Ripple's operations remains limited to donations and visibility, while the company's real work runs on RLUSD, creating a fundamental challenge for XRP's utility proposition.
