The XRP Ledger (XRPL) is gradually taking on the appearance of a behind-the-scenes financial infrastructure that traditional financial systems can integrate with without significant structural changes.
This stems from tokenized funds being stored directly on the ledger, while stablecoins can move seamlessly across the system. At the same time, protocol upgrades are continuously implemented, including features aimed at organizations wanting to settle on-chain without granting access to all partners.
However, a “dilemma” for XRP holders is that the rapid development of XRPL does not necessarily mean a corresponding increase in XRP demand.
That is the core story of 2026. XRPL can generate significant economic activity, while XRP only captures a small portion of the utility value—unless the market structure begins to use XRP as a central liquidity unit.
In other words, XRPL can succeed greatly as an infrastructure, while XRP struggles. The question is: which growth aspects truly require the use of XRP?
Burn Fees: Good Design, Weak Pricing Incentive
XRPL links network usage directly to XRP: transaction fees are paid in XRP and burned, rather than distributed to validators.
Under normal conditions, the base fee is about 10 drops (0.00001 XRP) per transaction and can increase during network congestion.
This design is reasonable for security, helping to prevent spam. However, it is not built as a revenue source for network operators, nor does it create a clear “cash flow” for market valuation.
At current fee levels, the amount of XRP burned remains very small. One million transactions at the base fee would burn only about 10 XRP.
Even with increased throughput, fees must stay low to remain competitive with stablecoin systems and banking payment networks.
If burned XRP increases significantly, it likely signals congestion—which runs counter to the goal of an efficient payment network.
Therefore, yes, XRP is consumed whenever XRPL is used. But the burning mechanism alone is unlikely to have a macro-level impact on valuation.
Reserve Mechanism: Locking XRP by Number of Accounts, Not Transaction Value
The reserve mechanism creates a clearer structural demand, though not tied to the total USD value settled.
XRPL requires locking a certain amount of XRP to open an account and own ledger objects like trust lines, payment orders, escrow, etc.—components that allow users to hold and trade assets other than XRP.
Currently, the mainnet reserve requirement is 1 XRP per account and 0.2 XRP per object. Trust lines—necessary for holding most issued assets like stablecoins and tokenized instruments—also consume reserves, with small exemptions for new accounts.
This creates a minimum demand for XRP: the more accounts and objects created, the more XRP is “frozen.”
However, this demand scales with user and object count, not with the nominal value of transactions.
A $1 billion tokenized fund could be held within a few issuing accounts. Conversely, millions of retail users with diverse trading strategies, trust lines, and orders could lock up much larger amounts of XRP.
Notably, XRPL reduced reserve requirements in December 2024 to improve usability: the basic reserve dropped from 10 XRP to 1 XRP, and reserve per object from 2 XRP to 0.2 XRP.
This was a deliberate trade-off. XRPL prioritizes expanding applications, while the scarcity effect from the reserve mechanism remains a secondary benefit.
However, if the ledger enters an “explosion of objects” phase—with a surge in accounts, trust lines, and on-chain activity—the amount of XRP locked could become significant. Still, this would not automatically increase scarcity based on large tokenized asset headlines.
Liquidity: Where XRP Can Truly Capture Value
If fees and reserves form the basic foundation, liquidity is the potential growth driver.
XRP’s greatest value lies in becoming a bridging asset or a pricing asset that market makers and institutions must hold as working capital to facilitate flows and low-spread quotes.
This mechanism also provides a “currency insurance premium” for key currencies.
Suppose cross-border payment volume reaches $1 trillion annually. That’s about $2.74 billion daily.
If market makers maintain a stock equivalent to half a day’s trading volume, they need roughly $1.37 billion in XRP as working capital.
At a price of about $1.39 per XRP and a circulating supply of approximately 61.1 billion XRP, this stock would be nearly 986 million XRP.
This could create a significant “demand sink” if maintained steadily, and it would grow with volume and market volatility.
However, XRPL could also grow here without XRP benefiting proportionally.
If stablecoins become the primary unit of account and settlement asset on XRPL—with trading pairs, collateral, and payment channels revolving around stablecoins—activity could increase sharply without requiring the market to hold large amounts of XRP beyond the minimum for fees and reserves.
In that case, XRPL would succeed as a payment infrastructure, with XRP serving only as an optional “intermediate step.”
ETFs and Custody: Off-Chain Scarcity Drivers
Another value capture channel independent of XRPL usage is regulated financial products holding XRP.
After the U.S. Securities and Exchange Commission settled with Ripple in August 2025, legal barriers for institutions significantly decreased.
Since then, XRP spot ETFs have emerged in the U.S., managing over $1 billion in assets.
The mechanism is straightforward: every $1 billion of new net capital into an ETF can lock XRP worth a proportional amount in custody.
At $1.39 per XRP, $1 billion equals about 719 million XRP.
If maintained and expanded across multiple issuers and institutional trusts, this channel could directly compete with on-chain reserve mechanisms, even matching the role of liquidity stockpiles in creating scarcity.
More importantly, this is a familiar model for traditional investors: a “storage vault” similar to commodity ETFs, accumulating underlying assets and reducing free circulating supply.
Protocol upgrades and strategic choices
XRPL’s protocol is evolving toward serving organizations, but adoption remains a choice, not an inevitability.
Early 2026 releases show both ambition and caution. Additionally, XRPL has introduced features like permissioned domains and permissioned DEXs—allowing only approved parties to trade.
This is a proposal: blockchain-based payments with controlled access, compliant with regulations.
These features could help XRPL attract pilot projects and real institutional flows. But the question of value capture remains.
Permissioned platforms could settle stablecoins with stablecoins or tokenize funds issued by their own entities, without requiring XRP as a central liquidity asset.
The Global Payment Race and XRP’s Position
XRPL not only competes with other crypto networks but also with existing global payment systems—stablecoin networks, banking alliances, and state-backed platforms.
Cross-border payment flows are estimated at hundreds of trillions of USD annually, projected to reach $290 trillion by 2030 according to industry forecasts.
In this environment, XRPL could generate significant network value: transaction throughput, asset issuance, DEX and AMM liquidity, and real-world asset tokenization.
But XRP only captures a portion of this value through certain technical mechanisms and market structures.
Fees and reserves establish a minimum baseline. Liquidity and custody management are new growth drivers, scaling with volume and working capital needs.
Ultimately, the bullish case for XRP isn’t just about XRPL’s growth. The key is whether this growth compels the market to route, quote, and hold inventory via XRP or not.
Thach Sanh
