- XRP was originally built to challenge financial institutions, not serve them, focusing on decentralization and peer-to-peer transactions.
- Ripple’s pivot to bank payments in 2014 did not change XRP’s core purpose: empowering individuals with a decentralized financial system.
XRP has long been associated with traditional financial institutions, particularly banks, due to its widespread use in cross-border payments. However, this popular narrative does not align with the true origins and purpose of XRP.
Contrary to what some might believe, XRP was not created for banks or the financial system. Instead, it was designed to challenge these institutions and provide a decentralized, peer-to-peer payment solution.
Panos, Co-founder of AnodosFinance, recently took on his X account to note that the XRP Ledger (XRPL) was developed by three key figures: David Schwartz, Arthur Britto, and Jed McCaleb and was launched in June 2012, well before Ripple Labs (now Ripple) was formed.
XRP Ledger was built by 3 developers (David Schwartz, Arthur Britto, Jed McCaleb), and by June 2012 it was live. Ripple didn’t exist back then. Months later Chris Larsen joined them and Ripple Labs Inc. (initially called OpenCoin) was formed. 100 billion XRP was also created…
— Panos
{X}
(@panosmek) March 20, 2025
Initially, Ripple was not even involved in the project. When Chris Larsen joined and Ripple Labs Inc. (originally OpenCoin) was formed, the XRP Ledger was already live and operational.
In the early days, Ripple’s main objective was not to cater to banks but to dissolve financial institutions’ control over the payments system.
Ripple Labs intended to create an open, decentralized payments network to remove the “walled gardens” of credit card companies, PayPal, and banks. This would provide individuals and businesses with an alternative to centralized systems laden with high fees and delays.
XRP and the Decentralized Finance Vision
From its inception, the XRP Ledger was designed with decentralized finance (DeFi) in mind. Unlike Bitcoin, which focuses on digital currency and basic peer-to-peer payments, the XRP Ledger added advanced capabilities such as a decentralized exchange (DEX), tokenized assets, and more.
These features allowed the network to support various financial activities, from trading tokens to managing digital assets and executing complex transactions without smart contracts.
The integration of a native DEX, built directly into the XRP Ledger, was a major development. This allowed for fast and efficient token trading, offering liquidity and competitive advantages to users.
Additionally, the Issued Assets feature enabled the representation of various asset classes, further expanding the XRP Ledger’s capabilities beyond traditional cryptocurrencies.
Ripple’s Shift to Bank-Focused Payments
In 2014, Ripple Labs moved toward focusing on the banking sector and cross-border payments. This shift was driven by the success of the DEX ecosystem, which at that point was already processing economic activity.
According to an ETHNews report, Ripple saw an opportunity to challenge the SWIFT system and create a level playing field for smaller banks by providing a blockchain-based solution that could offer faster, cheaper, and more secure transactions.
While this shift in focus has led some to associate XRP with the banking system, Ripple’s original mission was to disrupt financial intermediaries, not support them. Ripple’s efforts aimed to eliminate the monopolistic power of large banks and facilitate more equitable access to financial services.
The True Purpose of XRP
XRP and the XRP Ledger were created to empower individuals and businesses dissatisfied with the traditional financial system. The technology was not intended to serve banks but rather to offer a decentralized and user-friendly alternative to central authorities that often impose excessive fees, processing delays, and restrictions on financial transactions.
Despite Ripple’s strategy shift, XRP’s purpose remains clear: it was designed to create a decentralized financial ecosystem where individuals and businesses could transact freely without the interference of middlemen.
The post XRP Wasn’t Made for Banks—Here’s the Real Story appeared first on ETHNews.
